You can never be denied auto insurance based on your gender, race, or ethnicity. In most

circumstances, a company cannot refuse to sell you insurance based on where you live as long as

you are an “eligible”* person.

If you are denied auto insurance coverage, the agent or company must state a reason. Common

reasons include:

You can shop for cheaper auto insurance at any time – not just when your policy is up for

renewal. If you find a better price, you can cancel your old policy and seek a refund of your

unused premium. However, never cancel your old policy until a new one is in effect. A lapse in

coverage will result in higher rates in the future.

You have the right to change your coverages and policy limits at any time, even if you are not

near your renewal date. If you select lower policy limits or cancel nonmandatory coverages to

save money, you have a right to a refund of your unused premium within 60 days.

Starting in mid-2004, agents, brokers and companies must give you three coverage choices,

called “Insurance Scenarios,” when applying for a new policy, or at any time upon your request

if you are already insured. You must be told how each choice may affect what you pay and what

your benefits would be in the event of an accident. You always have the right to ask about

additional options.

You have the right to a timely response when seeking an appointment or application from an

agent, broker or company. Appointments should be scheduled so that you can obtain coverage

before your current policy expires. Please note that under current insurance regulations a

voluntary insurance company has five (5) business days from the date it receives a completed

application to either issue or deny coverage to the applicant. However, an application is not

considered complete until the company has obtained all pertinent information, including a copy

You have the right to ask about any payments made to others by your company and charged to

your policy. If you file a claim, it should be handled promptly and fairly. If a claim is denied,

you must receive a written explanation for the denial.

There are specific circumstances that allow an insurance company to cancel your policy during

the policy period. This is referred to as a “mid-term cancellation.” This may only occur when

fraud is discovered, when your driver’s license is suspended or when the policyholder fails to

make premium payments. A 15-day warning notice must be sent before the policy is canceled.

If your coverage is canceled, you can file an appeal with the New Jersey Department of Banking

and Insurance. Contact Consumer Protection Services, P.O. Box 329, Trenton, NJ 08625-0329,

or call (609) 292-5316 or 1-800-446-SHOP. The Department cannot guarantee that your policy

will be reinstated, so you should not delay shopping for alternate coverage.

If a carrier denies you coverage and does not state a reason, or if you believe you have been

treated unfairly, you can contact Consumer Protection Services.

Insurers can decline to renew coverage for several reasons. Most often, this occurs when a

driver’s record includes “at-fault accident” or motor vehicle violations and is no longer

considered an “eligible”* person in the voluntary market. Other reasons include:

New Jersey state law requires that any registered vehicle be covered by an insurance policy.

Failure to maintain coverage can lead to higher prices for new policies, placement in the

“assigned risk” pool, suspension or revocation of your driver’s license or registration and

additional fines and penalties.

Maintaining your auto insurance coverage requires that you:

For purposes of completing the insurance scenarios, insurers and agents should assume

the following:

2

approximate amounts indicated below:

A. The policyholders do not have many assets they need to

protect and wish to save money, but would like to retain the

right to sue. Instead of the commonly selected liability limits

of $100,000/$300,000 and $25,000, they choose a policy with

the following minimum limits: Bodily Injury Liability limits of

$15,000/$30,000; Property Damage Liability of $5,000 (or

combined single limit of $35,000) and Uninsured Motorist

Coverage in these amounts. Choosing these limits will result in

B. Choosing the coverage limits in A. and the Limited

Alternate Bodily Injury

Liability Coverage.

(The premium for the

Bodily Injury portion of

the policy in the

example above is

about $_______).

3

A. The policyholders have health insurance through work

and stable employment. Choosing to have their health insurance

as the primary source of coverage for medical expenses, instead

B. Choosing to have PIP (medical expense) coverage of

$75,000 instead of the commonly selected $250,000 and a PIP

C. Choosing the coverage limit and deductible in B. and the

“Medical Expense Only” option, (which excludes income

continuation benefits, essential services benefits, death benefits,

and funeral expense benefits) will result in a reduction of about

* Check with your health plan. Not all plans offer this option.

A. Excluding all physical damage coverage on the older

B. Use of a $1,000 deductible for physical damage on the

C. If the 19-year-old daughter does not ever drive the latemodel

vehicle, use of the “Named Driver Exclusion” for the

daughter on the late-model vehicle will result in a reduction of

D. Choosing to exclude the older vehicle from all physical

damage coverage and to apply the higher $1,000 deductible on

Commonly selected

Coverages and

Deductibles with

Alternate Medical

Expense (Personal

Injury Protection or

“PIP”) coverage.

(The premium for the

PIP portion of the

policy in the example

above is about

$______.)

Commonly selected

Bodily Injury Liability

and Medical

Expense Coverages,

but the Policyholder

wishes to save

money on coverage

for damage to their

vehicles.

(The premium for the

Physical Damage

portion of the policy

in the example above

is about $_____.)

4

After considering their options, the policyholders decide that they want to retain an unlimited

right to sue, but choose other options to reduce their auto insurance costs. Using options 1A, 2A,

11:3-10.1 Scope

This subchapter applies to claims arising under motor vehicle collision and comprehensive coverages.

11:3-10.2 Definitions

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly

indicates otherwise:

"Actual cash value", unless otherwise specifically defined by law or policy, means the lesser of the amounts for which the

insured or the designated representative can reasonably be expected to:

1. Repair the motor vehicle to its condition immediately prior to the loss; or

2. Replace the motor vehicle with a substantially similar vehicle. The amount shall include all moneys paid or payable as

sales taxes on the motor vehicle repaired or replaced. This paragraph shall not be construed to prevent an insurer from

issuing a policy where the amount of damages to be paid in the event of a total loss is a specified dollar amount.

"Agreed price" or "figure" means the amount agreed to by the insurer and the insured, or their representatives, as the

reasonable cost to replace the motor vehicle or to repair damages to the motor vehicle resulting from the loss, without

considering any deductible or deductions.

"Designated representative" means a person designated by the insured to represent the insured in negotiations with the

insurer in an attempt to settle the claim. The designated representative may be any person authorized by the insured who may

act legally in his or her behalf.

"Motor vehicle" shall have the meaning ascribed in N.J.S.A. 39:1-1.

"Substantially similar vehicle" means a vehicle of the same make, model, year and condition, including all major options of

the insured vehicle. Mileage must not exceed that of the insured vehicle by more than 4,000 miles. Mileage differences of

more than 4,000 miles may, at the option of the insured, be exchanged for the presence or absence of options or a cash

adjustment.

11:3-10.3 Adjustment of partial losses

(a) If the insurer intends to exercise its right to inspect, or cause to be inspected by an independent appraiser, damages prior

to repair, the insurer shall have seven working days following receipt of notice of loss to inspect the insured's damaged

vehicle, which is available for inspection, at a place and time reasonably convenient to the insured; commence negotiations;

and make a good faith offer of settlement.

(b) Negotiations must be conducted in good faith, with the basic goal of promptly arriving at an agreed price. Early in

negotiations, the insurer must inform and confirm in writing to the insured or the insured's designated representative all

deductions that will be made from the agreed price, including the amount of applicable deductible.

(c) If the insurer inspects the damaged vehicle or causes it to be inspected, the insurer shall promptly upon completing the

inspection furnish the insured or the designated representative of the insured with a detailed written estimate of the cost of

repairing the damage resulting from the loss, specifying all appropriate deductions.

(d) No insurer shall negotiate the settlement of any physical damage claim involving an automobile as defined at N.J.S.A.

39:13-1b with an unlicensed auto body repair facility or in any manner utilize an unlicensed facility in the adjustment,

negotiation or settlement of such a claim. It shall be the responsibility of the insurer to make a reasonable and diligent effort

to determine whether the facility is properly licensed.

(e) Subject to the requirements of (d) above, the insured may use any repair facility of his or her own choice. With respect to

automobile damage claims, the insurer shall notify in writing any insured who elects to use his or her own repair facility that,

pursuant to law, any entity engaged in the business of auto body repairs must be duly licensed. The notice shall further

advise the insured that the insurer is prohibited by law from negotiating, adjusting or settling an automobile damage claim

with an unlicensed facility. The written notice shall be furnished at the time of acknowledgment of the claim as provided at

N.J.A.C. 11:2-17.6 or upon the furnishing of its written estimate, as specified at (c) above, whichever is sooner. The insurer

must make all reasonable efforts to obtain an agreed price with the facility selected by the insured. The insurer may

recommend, and if the insured requests, must recommend a qualified repair facility at a location reasonably convenient to the

insured motor vehicle who will repair the damaged motor vehicle at the insurer's estimated cost of repairs, but in either event

the provisions of (g) below apply.

(f) All estimates, including revisions and adjustments, prepared by any repair facility, estimator or appraiser must be

included in each claim file.

(g) If the insured's vehicle is repaired at a repair facility whose name is furnished by the insurer under (e) above for a sum

estimated by the insurer as the reasonable cost to repair the vehicle, the insurer:

1. Shall select a repair facility that issues written guarantees that any work performed in repairing damaged vehicles meets

generally accepted standards for safe and proper repairs;

2. Shall cause the damaged vehicle to be restored to the condition it was in prior to the loss, at no additional cost to the

insured and within a reasonable time, if the repair facility does not repair the damaged vehicle in accordance with generally

accepted standards for a safe and proper repair.

(h) Whenever an insurer elects to repair its insured's vehicle, that is, physically take the vehicle and have it repaired, the

election must be in writing addressed to the insured and contain a reasonable estimate of the time period within which the

vehicle will be repaired. The insurer shall guarantee, in writing, that the work performed meets generally accepted standards

for safe and proper repairs.

(i) Deductions for betterment and depreciation are permitted only for parts normally subject to repair and replacement during

the useful life of the insured motor vehicle. Deductions for betterment and depreciation shall be limited to the lesser of an

amount equal to the proportion that the expired life of the part to be repaired or replaced bears to the normal useful life of that

part, or the amount by which the resale value of the vehicle is increased by the repair or replacement. Calculations for

betterment, depreciation and normal useful life must be included in the insurer's claim file.

(j) Deductions for previous damage or prior condition of the vehicle must be measurable, discernible, itemized and specific

as to the dollar amount, and those deductions must be included in the insurer's claim file. The deductions shall be limited to

the amount by which the resale value of the motor vehicle is increased by the estimation of the previous damage or the

correction of the prior condition.

(k) The insurer must mail or hand deliver to the insured or the designated representative its proof of loss or payment within

five working days after the insured has accepted the insurer's offer.

(l) The insured shall have the right to receive the proceeds of any settlement. The insurer may not insist on making

settlement proceeds jointly payable to the insured and the repair facility, or payable to the repair facility only.

(m) The insured may elect to have the insurer pay the repair facility directly in order to expedite recovery of the motor

vehicle. The insured must make this election in writing.

11:3-10.4 Adjustment of total losses

(a) If the insurer elects to make a cash settlement, it must bear in mind at all times that the insured's position is that of a

retail consumer and the settlement value arrived at must be reasonable and fair for a person in that position. Written,

itemized valuations showing all options and deductions shall be included in the insurer's claim file and presented to the

insured no later than the date of payment. If the insurer elects to make a cash settlement, its offer, subject to applicable

additions or deductions, must be one of the following plus applicable sales tax:

1. The average of the retail values for substantially similar motor vehicles as listed in the editions current for the date of loss

of two valuation manuals approved by the Commissioner.

i. The average figure arrived at may be reduced or increased by considering all factors, including, but not limited to,

mileage tables and the presence or absence of extras.

ii. If the destroyed vehicle included an option which is listed in one manual but not in the other, the value of the option shall

not be averaged. The insured shall receive full value for the option by carrying over the amount listed to the other manual.

The option carryover shall apply only in those instances where the option has not been considered by the used vehicle guide

either as a separate item or included in the vehicle's base value.

iii. If a manual is submitted for approval by the Commissioner its accuracy must meet objective criteria for the values of

substantially similar vehicles of at least 85 percent of all makes and models for the last 15 years and shall include all major

options. A sufficient number of vehicles shall be used for each year, make and model to represent a cross-section sufficient

to determine fair market values. At the time of request for approval, the source of the manual's data must be revealed to the

Commissioner in a manner that can be verified by the Department. Manuals approved for use on or after January 1, 1976 are

"Automobile Red Book" and "Older Car/Truck Red Book" published by Maclean Hunter Market Reports, Inc. and the

"N.A.D.A. Official Used Car Guide" and "N.A.D.A. Official Older Car Guide" published by the National Automobile

Dealers Used Car Guide Company.

2. A quotation obtained by the insurer for a substantially similar motor vehicle from a dealer located within a reasonable

distance from the principal place of garagement of the insured vehicle. Unless otherwise agreed by the insured, a reasonable

distance shall not exceed 25 miles from the principal place of garagement. The vehicle must be available for purchase by the

insured and the insured must be able to purchase it for the insurer's cash offer plus applicable deductions. The insurer shall

maintain in its claim file proof of the vehicle's availability and the name and location of the dealer, stock number, vehicle

identification number and description of the substantially similar vehicle.

3. The fair market value of the insured vehicle, determined by using a source including a computerized database approved

by the Commissioner that meets all of the following minimum criteria:

i. The source must give primary consideration to the values of vehicles in the local market area, but if necessary to obtain a

reasonable cross-section of the market, may consider vehicles in the next closest area.

ii. The source shall produce fair market values of substantially similar vehicles for at least 85 percent of all makes and

models for the last 15 years and shall include all major options. A sufficient number of vehicles must be used for each year,

make, and model to represent a cross-section of the market sufficient to determine fair market value.

iii. If the database uses several price ranges for the same model vehicle depending on the condition of the vehicle, it must

clearly indicate what condition the vehicle is being valued at and define in detail the difference between such rating

categories. Documentation of the condition of the insured vehicle must be made a part of the written valuation.

iv. At the time of request for approval the source of the database shall be revealed to the Commissioner in a manner that can

be verified by the Department.

4. If it is not possible to value the insured vehicle by using the method set forth in (a)1, 2 and 3, the insurer shall determine

the retail value of the vehicle by using the best available method and shall fully explain in writing to the insured how its offer

was calculated.

(b) If the insurer is notified in writing within 30 calendar days of the receipt of the claim draft that the insured cannot

purchase a comparable vehicle at the market value established by the insurer, the insurer shall reopen its claim file and the

following procedures will apply:

1. The insurer may locate a substantially similar vehicle by the same manufacturer of the same year, make and model, with

similar options, mileage, and condition as the destroyed vehicle from a licensed dealer. Such vehicle must be within a

reasonable distance not to exceed 25 miles from the insured's principal place of garaging;

2. The insurer shall either pay the difference between the market value before applicable deductions and the cost or the

market value as determined by (a)2 above of a substantially similar vehicle located by the insured or negotiate and effect

purchase of this vehicle for the insured;

3. The insurer may elect to offer a replacement vehicle in accordance with the provisions as in (e) below; or

4. The insurer or insured may conclude the loss settlement as provided for under the appraisal section of the insurance

contract in force at the time of loss. This appraisal shall be considered as binding against both parties, but shall not preclude

or waive any other rights either party has under the insurance contract or under law.

(c) The insurer shall advise the insured in writing of the rights of recourse at the time the settlement draft is issued and retain

a copy of the notice in its claim file.

(d) An insurer shall use the same source of settlement for all claims unless it is documented that the primary settlement

source is not available in the case of a particular vehicle. At the request of the Commissioner, the insurer shall provide the

Department with its primary source of valuation for vehicles.

(e) If the insurer elects to replace the vehicle, the replacement vehicle must be an immediately available, substantially similar

vehicle that is both furnished and paid for by the insurer, subject to the deductible, if any, and including applicable sales tax.

(f) If the insured vehicle is a private passenger automobile of the current model year, meaning that the vehicle has not been

superseded in the market place by an officially introduced succeeding model, the insurer shall utilize one of the following

methods in the settlement of the loss, unless the utilization of (a) or (b) above is more favorable to the consumer.

1. Either the insurer shall pay the insured an amount equal to the reasonable purchase price on the date of the loss of a new

identical vehicle, less any applicable deductible and an allowance for depreciation in accordance with the schedule below;

or

2. The insurer shall provide the insured with a new identical replacement vehicle charging the insured for any applicable

deductible and for depreciation in accordance with the schedule below:

Depreciation Schedule

Purchase Price Depreciation per mile

Up to $ 6,500 $0.10

$ 6,501-$ 8,000 0.12

8,001- 10,000 015

10,001- 12,000 0.18

12,001- 15,000 0.21

15,001- 20,000 0.25

More than $20,000 0.29

(g) In the event of a total loss, any parts of the insured vehicle included in its valuation which are removed by the insured or

the designated representative shall have their value deducted from the final settlement figure. This section shall not be

construed to grant a right of removal.

(h) The following provisions of N.J.A.C. 11:3-10.3 also shall apply to the adjustment of total losses, except that the insurer

shall have a total of 14 working days to comply with the requirements of subsections (a), (b), (c), (h), (i), (j) and (k) of

N.J.A.C. 11:3-10.3.

(i) This section does not prohibit an insurer from issuing a stated value policy insuring against physical damage where the

amount of damages to be paid in the event of a total loss is a specified dollar amount.

(j) If the vehicle is a total loss, the insurer may require that the insured transfer ownership of the vehicle to recoup salvage as

a condition of settlement.

11:3-10.5 Unreasonable delay

(a) Unless a clear justification exists, physical damage claims will have a maximum payment period of 30 calendar days. A

payment period is the period between the date of the receipt of the notice of loss by the insurer, and:

1. The date the settlement check is mailed; or

2. The date on which the damaged vehicle is returned to use when the insurer elects to repair or have repaired the insured

vehicle; or

3. The date on which the damaged vehicle is replaced by the insurer.

(b) If any element of a physical damage claim remains unresolved more than 30 calendar days from the date of receipt of

notice of loss by the insurer, the insurer shall provide the insured with a written explanation of the specific reasons for delay

in the claim settlement. An updated letter of explanation shall be sent again every 30 calendar days thereafter until all

elements of claim are either honored or rejected.

(c) Any letter of explanation, rejection or acceptance of any element of a claim shall contain in the upper right hand corner

the date of receipt of notice of loss by the insurer and be identified as such. The letter shall also contain the identity and

claim processing address of the insurer, and the insured's policy number and claim number.

11:3-10.6 Loss of use

In the event of the theft of the entire vehicle the insurer at the time of notification shall advise the insured of his or her right

under the policy to be reimbursed for transportation expenses. The notification must be confirmed in writing immediately

after receipt of notice of theft. All conditions and benefits related to this coverage as stated in the policy must be contained in

the notification to the insured.

11:3-10.7 Subrogation agreements

(a) If an insured has received payment under his or her physical damage coverage that is subject to a deductible, the insured

shall share, pro rata, with the insurer any net recovery received by the insurer from third parties.

(b) Net recovery shall be the total recovery less the insurer's allocated loss adjustment expenses attributable to such recovery.

The formula for computing net recovery and the insured's share of recovery of the deductible may be stated as follows:

1. Total recovery – Allocated loss adjustment expenses = Net recovery

11:3-37.1 Purpose and scope

The purpose of this subchapter is to establish guidelines for the order of benefit determination between a

plan of health insurance and personal injury protection provided through an automobile policy pursuant to N.J.S.A.

39:6A-4, when a named insured elects to have his or her personal injury protection become secondary coverage for

the provision of benefits for medical expenses incurred due to injuries sustained in an automobile accident. This

subchapter also sets forth the requirements for the order of benefit determination between a plan of health insurance

and personal injury protection provided pursuant to N.J.S.A. 39:6A-4 or 39:6A-3.1, when personal injury protection

is primary coverage. The provisions of this subchapter shall apply to all automobile policies, as that term is defined

at N.J.S.A. 39:6A-2a, issued to New Jersey residents, or renewed on or after January 1, 1991, and to all health

benefits plans which have been or will be delivered or issued for delivery in this State.

11:3-37.2 Definitions

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context

clearly indicates otherwise.

"Actual benefits" means those benefits determined to be payable for allowable expenses.

"Allowable expense" means a medically necessary, reasonable and customary item of expense covered by an

insured's health benefits plan(s) or PIP plan as an eligible expense, at least in part. When a plan provides benefits in

the form of services, the reasonable monetary value of each such service shall be considered as both an allowable

expense and a paid benefit.

"Benefits" means the provision of the following in consideration of payment of premiums or fees on a prepaid or

postpaid basis:

1. Services, including supplies;

2. Payment of expenses incurred;

3. A combination of 1 and 2 above; or

4. An indemnification.

"Eligible expense" means:

1. In the case of health benefits plans, that portion of the medical expenses incurred for treatment of

an injury which is covered under the terms and conditions of the plan, without application of the deductible(s) and

copayment(s), if any.

2. In the case of PIP plans, that portion of the medical expenses incurred for treatment of an injury

which, without considering any deductible and copayment, shall not exceed:

i. The percent or dollar amounts specified on the medical fee schedules, or the actual billed

expense, whichever is less; or

ii. The reasonable amount, as determined by the automobile insurer, considering the medical

fee schedules for similar services or equipment in the region where the service or equipment was provided, when an

incurred medical expense is not included on the medical fee schedules.

"Health benefits provider" means any person, whether subject to the regulation of the New Jersey Department of

Banking and Insurance, Department of Health and Senior Services, or both, or not otherwise subject to such

regulation, who contracts to provide health services, provide reimbursement for the cost of health services in whole

or in part, or to provide for indemnity in the event health services are used, in return for a prepaid or postpaid

premium or fee or other consideration, including, but not limited to:

1. Insurers, as defined at N.J.S.A. 17B:17-2;

2. Hospital service corporations, as defined at N.J.S.A. 17:48-1;

3. Medical service corporations, as defined at N.J.S.A. 17:48A-1;

4. Health service corporations, as defined at N.J.S.A. 17:48E-1;

5. Health maintenance organizations, as defined at N.J.S.A. 26:2J-2;

6. Dental service corporations, as defined at N.J.S.A. 17:48C-2;

7. Dental plan organizations, as defined at N.J.S.A. 17:48D-2;

8. Medicare;

9. Medicaid;

10. State Employees Health Benefits Plan;

11. CHAMPUS;

12. Self-insured programs; and

13. An entity organized under the laws of any other state or jurisdiction which delivers certificates to

residents of New Jersey evidencing coverage under a contract issued and delivered in a state or jurisdiction other

than New Jersey.

"Hospital expenses," when used by the automobile insurance PIP plan, means those expenses defined at N.J.S.A.

39:6A-2f.

"Injury" means bodily injury sustained by an insured as a result of an accident while occupying, entering into,

alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or

from an automobile.

"Insured" means a person eligible for coverage, at least in part, for medical expenses incurred for treatment of

injuries, under an automobile policy PIP medical expense provision, and who meets the definition of a named

insured or family member.

1. Named insured means the person or persons identified as the insured in the automobile policy and

if an individual, that person's spouse, if the spouse is a resident of the same household, except that if the spouse

ceases to be a resident of the household of the named insured, coverage for that spouse shall continue until the

expiration of full term of any policy period in effect at the time of the cessation of residency.

2. Family member means any relative of the named insured or the named insured's spouse who:

i. Is related to the named insured or named insured's spouse by blood, marriage, adoption or

guardianship;

ii. Resides in the household of the named insured or spouse of the named insured; and

iii. Is not a named insured under another automobile policy.

"Medical expenses" is as defined in N.J.A.C. 11:3-4.2.

"Medical fee schedule" means that list of services, procedures and supplies to which have been assigned a

maximum fee or percentage of a fee payable by an automobile insurer for expenses incurred as a result of the

rendering to an insured any of those specific services, procedures or supplies for injuries, which list is set forth at

N.J.A.C. 11:3-29.

"Out-of-State automobile insurance coverage" or "OSAIC" means any coverage for medical expenses under an

automobile insurance policy other than PIP, as PIP is defined herein, including automobile insurance policies issued

in another state or jurisdiction.

"PIP" means personal injury protection coverage provided as part of an automobile insurance policy pursuant to

N.J.S.A. 39:6A-4 or 39:6A-3.1, issued in New Jersey, specifically those provisions for medical expenses coverage.

"Plan" means any policy, contract, certificate, booklet, evidence of enrollment, program, or other such term which

evidences the existence of a relationship between a health benefits provider or PIP carrier and an insured with

respect to the provisions of hospital, medical, surgical, dental and/or other health care related benefits, at least in

part.

"Primary coverage" means coverage by any plan which determines its actual benefits payable on allowable

expenses incurred by an insured for treatment of injuries without taking into consideration the existence of any

coverage for which the insured may be eligible provided secondary in accordance with this subchapter. There may

be more than one plan providing the insured primary coverage.

"Secondary coverage" means coverage by any plan which determines its actual benefits payable on all allowable

expenses incurred by an insured for treatment of injuries after all plans providing primary coverage have considered

expenses incurred and paid actual benefits.

11:3-37.3 Health benefits providers

(a) Nothing in this subchapter shall be construed as requiring any health benefits provider to offer, provide, or

continue coverage to or for any individual or group, except as may be set forth by other laws of this State, or of the

Federal government.

(b) Nothing in this subchapter shall be construed as requiring any health benefits provider to provide coverage for

any treatment or service not otherwise covered under the terms of the applicable health benefits plan.

(c) No health benefits contract or policy delivered or issued for delivery in this State, or renewed, continued or

converted on or after January 1, 1991, shall contain any provision, rider, waiver of endorsement or other instrument

which restricts, limits or excludes coverage, directly or indirectly, of services or expenses otherwise eligible under

the policy or contract on the grounds that such expenses or services would be covered under an automobile policy

PIP provision for which the insured would be eligible had the named insured on the automobile policy not selected

the PIP-as-secondary coverage option.

(d) No health benefits contract or policy delivered or issued for delivery in this State, or renewed, continued or

converted on or after January 1, 1991, shall contain any provision, rider, waiver or endorsement, or other instrument

which restricts, limits or excludes coverage, directly or indirectly, of services or expenses otherwise eligible under

the policy or contract on the grounds that:

1. Such expenses arise from an automobile-related injury;

2. Such expenses are covered or paid by PIP; or

3. Such expenses are covered or paid by OSAIC except for reductions in benefits when the health benefits

contract provides secondary coverage as defined in and permitted by this rule.

(e) A health benefits contract or policy may provide that it is always primary to OSAIC, or may provide that it will

determine its benefits as if it were secondary to any OSAIC. If the health benefits contract or policy provides that it

will determine its benefits as if it were secondary to OSAIC and the OSAIC either contains a provision that it is

always excess or secondary, or refuses to cooperate in determining the amount of benefits payable by the health

benefits plan as secondary coverage provider, the health benefits plan shall provide primary coverage.

11:3-37.4 Application of the PIP-as-secondary coverage option

(a) When a named insured elects the PIP option, whereby the named insured intends that medical expenses incurred

for treatment of an injury are to be covered by a health benefits provider or providers, as evidenced on the Coverage

Selection Form, then the medical expense provisions of the PIP coverage shall be considered to be secondary

coverage for the purposes of the order of benefit determination, and all health benefits plans of an insured subject to

the PIP option elected shall be considered to be primary coverage.

(b) The election by the named insured to make PIP medical expense provisions secondary coverage shall apply to

only the named insured and family members of the named insured who reside in the named insured's household and

are not named insureds under other automobile policies.

(c) The election by the named insured to make PIP medical expense provisions secondary coverage shall continue

in force as to subsequent renewal or replacement policies until the automobile policy insurer or its authorized

representative receives a properly executed written request revoking the selection of this option.

(d) In the event that an insured is ineligible for health plan coverage of medical expenses, or is eligible for coverage

under a dental expense or dental service plan only when an injury occurs, despite the selection of the PIP-assecondary

coverage option by the named insured, benefits shall be provided to the insured through PIP coverage in

accordance with N.J.A.C. 11:3-37.8.

11:3-37.5 Health benefit plan standards and the PIP premium reduction

(a) An automobile insurer may eliminate the premium reduction on the base rate applicable to the amount of

medical expense benefit chosen in conjunction with the PIP-as-secondary coverage option election if the automobile

insurer complies with (b) below, and verifies that the coverage specified by the named insured:

1. Excludes the provision of benefits for treatment of injuries of an eligible insured when expenses incurred

in relation to treatment of those injuries are eligible expenses under an automobile policy's PIP provisions; or

2. Provides that it is always secondary, or otherwise will not be a primary provider of benefits;

3. Provides benefits only for dental expenses or dental services; or

4. Provides benefits only for prescription drugs.

(b) An automobile carrier shall notify a named insured if the automobile insurer determines that the health benefits

plan(s) specified by the named insured contain exclusionary or restrictive coverage provisions as set forth in (a)

above, or if the automobile insurer determines that one or more of the insureds covered under the automobile

insurance policy is not provided coverage by at least one of the health benefit plan(s) specified by the named

insured, and, therefore, the named insured's premium reduction for PIP medical expense benefits will be eliminated.

1. The notice shall be in writing and shall specify the reasons why the automobile insurer believes the named

insured's health plan coverage is not in compliance with this subchapter.

2. The automobile insurer may include in the notice a demand for payment of the premium reduction difference

with an explanation that failure to pay the indicated premium reduction difference may result in early cancellation of

the automobile policy in accordance with (c) below.

3. The notice shall be sent no later than 30 days prior to the date of cancellation as calculated in accordance with

(c) below. A notice which is sent 30 days prior to the date of cancellation shall either contain a statement that it is a

notice of cancellation, or be attached to a notice of cancellation, setting forth the effective date of cancellation.

(c) The effective date of the cancellation of a policy for nonpayment of premium shall not be earlier than 10 days

prior to the last full day of which premium received by the company, prior to the date of preparation of the

cancellation notice, would pay for coverage on a pro rata basis. In calculating the effective date of the cancellation,

the premium applicable to the coverage provided by the policy and the premium received by the company at or prior

to the time the cancellation notice was prepared shall be the premium used for the calculation and determination of

such effective date.

1. No cancellation in accordance with (c) above shall be effective unless prior thereto, the automobile

insurer shall have notified the named insured that the premium reduction difference had to be paid to avoid

cancellation, as specified in (b)2 above.

2. No cancellation notice shall be mailed prior to 30 days in advance of its effective date.

(d) If the insured provides payment of the full premium amount and subsequently provides proof that coverage is

not restricted in the manner set forth in accordance with (a) above, or that all insureds under the automobile policy

were provided coverage by a health benefits plan at the time notification of noncoverage was sent, and that such

coverage continues and is not restricted in the manner set forth in accordance with (a) above, the automobile insurer

shall refund the monies paid in excess of the full reduction, or shall credit any excess paid on the reduced premium

to the extent any premium payment is still unpaid on the policy.

11:3-37.6 Order of benefits determination when PIP is secondary coverage

(a) When the named insured of an automobile policy has selected the PIP-as- secondary coverage option, all health

benefits plans for which the insured is eligible shall provide coverage for the allowable expenses incurred by the

insured due to an automobile-related injury prior to any benefits for medical expenses being paid by a PIP plan.

(b) If the insured is eligible for coverage under more than one group health benefits plan, the group health benefits

plans shall coordinate benefits with one another in accordance with the rules set forth for such plans at N.J.A.C.

11:4-28.

(c) The PIP plan shall provide benefits for allowable expenses remaining uncovered after all health benefits plans

for which the insured is eligible have paid benefits towards those allowable expenses.

(d) The PIP plan shall continue to be liable for expenses related to the same occurrence as the expenses are

incurred, whether or not the health benefits plan(s) in force at the time of the accident terminate(s) coverage, or

benefits provided under the health benefits plan(s) are exhausted subsequent to the occurrence of the accident, up to

the maximum PIP benefits available to the insured under the terms of the automobile policy.

(e) Total benefits paid by an insured's health benefits and PIP plans shall not exceed the amount of total allowable

expenses.

11:3-37.7 Determination of PIP medical benefits payable when PIP is secondary coverage

(a) In calculating the actual benefits to be paid by the automobile insurer when the PIP-as-secondary coverage

option has been selected, the automobile insurer shall first determine the amount of eligible expenses which would

have been paid after application of the deductible and copayment limitations had the PIP-as-secondary coverage

option not been selected.

1. In the event the remaining allowable expenses are less than the benefits calculated pursuant to (a) above,

the automobile insurer shall pay actual benefits equal to the remaining allowable expenses, without reducing the

remaining allowable expenses by its deductible or copayments.

2. In the event the remaining allowable expenses are greater than the benefits calculated pursuant to (a)

above, the actual benefits paid by the automobile insurer shall be the benefits calculated pursuant to (a) above,

without reducing the remaining allowable expenses by its deductible or copayments.

(b) In paying actual benefits, the automobile insurer shall not:

1. Reduce its actual benefits payable on account of any deductibles or copayments of the health benefits

plans which have provided