A split decision from the New Jersey Supreme Court on medical coverage limits in low-cost auto insurance policies has focused attention on the inherent conflict between affordable premiums and full reimbursement for injuries.

The decision was hailed by some as safeguarding the no-fault system and keeping down insurance premiums. Others, however, hope the Legislature will revise the insurance laws in light of the ruling, which they said will send some motorists into bankruptcy with its limitations on medical coverage.

The justices ruled by a 3-2 margin on March 26 that motorists cannot recover medical expenses exceeding $15,000 if they opted for personal injury protection, or PIP, coverage in that amount instead of the standard $250,000. To rule otherwise, Justice Jaynee LaVecchia wrote in the majority opinion, would be a return to fault-based suits consisting solely of economic damage claims for medical expenses in excess of an elected, lesser level of PIP coverage, which is not what lawmakers intended.

LaVecchia invited the Legislature, if it disagrees with the court's assessment, to “make its intention to introduce fault-based suits into the no-fault medical reimbursement scheme more explicit.”

Some practitioners were critical of what they predict will be the harsh impact the ruling has on the finances of low-income motorists.

At issue is a 1998 revision to the no-fault insurance law, allowing drivers to save on premiums by selecting PIP coverage of $15,000, $50,000, $75,000 or $150,000, instead of the previously mandated $250,000. Justice Barry Albin, who wrote the dissenting opinion, said the Legislature did not intend for low-income accident victims to surrender their right to sue for uncompensated medical coverage because they could not afford higher PIP limits.

Thomas Grimm of Margolis Edelstein in Mount Laurel, who represents insurance companies in coverage disputes, believes the majority on the Supreme Court made the right decision in the PIP case. Grimm, the author of a guide to New Jersey PIP law, called the ruling “a good decision in the sense that the Supreme Court followed the intent of the Legislature when they passed” the Automobile Insurance Cost Reduction Act.

Grimm said the ruling is “a good thing from the defense side,” but added, “plaintiffs attorneys will disagree.” He thinks plaintiffs lawyers will seek to get rulings at the Appellate Division that minimize the reach of the Supreme Court decision.

“I think they'll try to narrow the effect of what the decision will be,” Grimm said. “I suspect plaintiffs attorneys will argue that where the plaintiff's noneconomic claims are not barred, in those cases the Supreme Court decision should not apply. I suspect that argument won't be given much weight,” Grimm said. “I suspect the Supreme Court meant to bar all claims for economic damages where the plaintiffs' chose less than the standard, default PIP coverage.”

But Louis DeVoto of Rossetti DeVoto in Cherry Hill, who represents plaintiffs in automobile injury cases, expressed concern about the ruling's impact on low-income motorists.

“I was surprised by the decision. I thought it left those poorest among us without a remedy,” DeVoto said.

People with larger incomes and the middle class tend to opt for the $250,000 in PIP coverage while those who select the $15,000 option are most often people with low incomes and unstable employment records, who frequently find themselves laid off and without health insurance, DeVoto said. Such a person might face $50,000 in medical bills from an auto accident, which could send them into bankruptcy.

DeVoto says the situation calls for legislative action to minimize the ruling's impact on the state's poorest residents.

“I would like to see the Legislature revisit that issue and either correct that injustice or perhaps change the way those limits work,” DeVoto said.

Another plaintiff-side lawyer, John Sakson of Stark & Stark in Princeton, likewise hopes the Legislature will act in response to the Supreme Court ruling.

“Frankly, I think Justice LaVecchia got it wrong. I think Justice Albin got it right—he understood it better,” Sakson said, adding that Albin's dissent is “erudite, well-written and the logic is there.”

Sakson said many motorists are choosing the lower PIP limits because they're cheaper, without realizing they're putting themselves in jeopardy. It's a big enough issue to people that I think the Legislature should address it.”

Sakson hopes the Legislature will “expressly state what their intent is in this area. If you don't get to make that claim [for medical damages in excess of PIP coverage], that's the law. That's harsh, but that's the law.”

Donald Caminiti of Breslin & Breslin in Hackensack, who represents plaintiffs in personal injury cases, is “not happy” with the Supreme Court decision. He questions whether the statute revision allowing PIP coverage as low as $15,000 was a sound move. But given the circumstances, limiting medical coverage to $15,000 is “very, very unfair to lower- or moderate-income families.”

Caminiti said he is hopeful that lawmakers will “do the right thing. I think they should make clear that [medical] bills that exceed the PIP [coverage] that the person has lawfully bought should be recoverable in a lawsuit. I don't think they ever meant to have that gap in coverage that the Supreme Court just created,” Caminiti said.