PIP Subrogation Statute of Limitations Trigger Clarified by NJ App. Div.

Like most states, New Jersey permits a PIP carrier to seek reimbursement from the responsible tortfeasor or its insurer for benfits paid under certain circumstances. The most common instances include accidents where the tortfeasor was operating a commerical vehicle or was not required to have PIP coverage.

Under the controlling New Jersey statute, a PIP carrier must seek reimbursement within two years “of the filing of the [PIP] claim.” Simple to state but difficult to implement because the statute does not contain a clear definition of what constitutes “the filing of the claim.” Is it when the insured notifies the PIP carrier of the underlying accident? When a medical provider submits a bill for payment? Some other event?

In NJM v. Holger Trucking, the New Jersey Appellate Divison holds that the “filing of the claim” means when the insured submits an application or claim form seeking benefits to his insurer. Finding the need for a single fixed time to provide both PIP carrier and the torfeasor certainty on this issue to be paramount, the court rejected some earlier interpretations that found the submission of a bill or request for payment by a medical provider starts the “ticking” of the statute of limitations clock. Now, a PIP carrier and those subject to claims for reimbursement are on notice of when the PIP carrier’s time to seek reimbursement begins.

For the owners of commerical vehicles or tortfeasors potentially subject to claims for PIP reimbursement, we recommend obtaining a complete copy of the PIP insurer’s file. You should closely examine and diary when the application or claim form was received by the PIP insurer. Once the two year clock has run, you can safely settle the underlying claim secure in the knowledge that you are immune from claims of PIP reimbursement.

If you have any questions or comments about this post, please email Paul at pclark@wcmlawl.com