<!–Saxotech Paragraph Count: 9
–>

New Jersey proposed a sweeping overhaul last week to its regulations for the personal injury protection component of auto insurance, hoping to curb rising premiums. The changes affect how and what doctors can bill for treatments and restructure the process for appealing a denied claim.

Though New Jersey consistently ranks among the most expensive states to purchase auto insurance, rates did decline after former Gov. James McGreevey enacted changes in 2003 that spurred competition. But in recent years, personal injury costs have driven rates back up, officials say. The state’s Department of Banking and Insurance says 97 percent of rate increases in 2010 were due to rising personal injury costs, and that for every dollar insurance companies take in for personal injury premiums, they spend $1.23 on benefits.

That’s a recipe for escalating rates that regulators say they want to fend off with the new rules. Here are some questions and answers about what the rules do and who they affect:

Q: What is personal injury protection?

A: Personal injury protection, or PIP, pays for medical costs, lost wages and other expenses if you are in a car accident. It doesn’t pay for damage to the vehicle. It’s also called “no-fault” coverage because the insurance company pays regardless of whether the accident was your fault, and claims don’t raise your premiums. About a dozen states, including New Jersey, require drivers to have personal injury coverage.

Q: Why does the system need a makeover?

Similar to Medicare, the insurance system uses a list of common procedures that specifies how much a doctor is reimbursed for each procedure. Under the old rules, loopholes allowed doctors to take in more than the listed rate by billing instead for procedures that weren’t on the list.Article source: http://feeds.stateline.org/~r/StatelineorgRss-Transportation/~3/UzlTBVdnKKQ/What-do-new-car-insurance-rules-mean-NJ-