Medical Expense Benefit Limits, Deductibles, Co-payments, and Coverage Options
Limits and cost-sharing
The standard PIP medical expense limit is $250,000 per person per accident. The basic policy limit is $15,000. The limit is not a liability limit and is not shared with income, essential-services, or death benefits in the same way; track each benefit separately.
Insurers must offer deductible choices, commonly $250, $500, $1,000, and $2,500. The deductible applies to medical expense benefits before the insurer pays. A 20% co-payment generally applies after the deductible, unless the policy contains a lawful alternative or a statutory exception. The insured's out-of-pocket amount is the deductible plus the co-payment share, until the PIP limit is exhausted.
Coverage options include the lawsuit-threshold choice, higher income-continuation limits, and different medical deductibles. A lower deductible raises premium; a higher deductible lowers it. The named insured's selection controls, so producers must document the choice.
Worked example
A $10,000 medical bill arises under a policy with a $500 deductible and 20% co-payment. The insured first pays $500. The remaining $9,500 is split: the insured pays 20% ($1,900), and PIP pays $7,600. If the PIP limit were nearly exhausted, payment would be reduced to the remaining limit.
Traps
Do not apply the co-payment before the deductible. Do not apply the deductible to every bill rather than to the accident claim. Do not assume the $250,000 limit covers all benefit categories. Do not ignore basic-policy limits or a lawful coordination provision.