In A Car Accident In New Jersey? Beware Insurance Limitations

Posted on: November 21, 2016

According to a recent study conducted by the National Traffic Safety Administration, an estimated 2 million people are injured in motor vehicle accidents in the United States each year. And while that may seem like a small percentage of the estimated 214 million licensed drivers in the U.S, the numbers become all too real when you or a loved one is injured in a crash.

We previously talked about how paying less on auto insurance can fail you in terms of providing adequate personal injury benefits, but cheap auto policies also come with other limitations you may not be aware of until it’s too late.

We’re talking about Limitations, and the option you choose on your policy can have a tremendous impact on the benefits you receive to cover medical expenses, pain and suffering in the event of a serious accident.

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How Car Insurance Works In New Jersey

In the state of New Jersey, drivers are legally required to purchase auto insurance. New Jersey is also one of a handful of states that follow a no-fault system for car insurance, which means that if you’re injured in an accident, you are required to turn to your own insurance first – and perhaps exclusively – to be compensated for medical expenses and other related losses.

In short, it doesn’t matter who is at fault in the accident (though there are even complexities within the no-fault rule itself – a conversation for another time!), and obtaining compensation can be complex due to a number of options and exceptions that may apply.

What Are Limitations?

When you select an insurance policy, in addition to choosing your PIP benefits, you are given two options for lawsuit limitations: the less expensive “Verbal Threshold”, or the more traditional “No Threshold.”

The limitations you select on your auto insurance policy determine your ability to file a personal injury lawsuit against the other driver.

Here’s what you need to know about limitations and their implications on you as a New Jersey driver.

Limitations On New Jersey Auto Policies And Their Impact On You

If you’re in an accident that results in chronic pain or permanent injury, you may have a difficult time getting full compensation from the insurance company if you’ve chosen the less expensive “Verbal Threshold” limitation.

Let’s say, for instance, that two identical individuals are injured by identical crashes. Everything about their injuries are the same, except for the fact that one of the drivers has the Verbal Threshold limitation while the other has No Threshold.

The driver with No Threshold is permitted to sue for unlimited damages, including pain and suffering, as well as non-economic harm. Injuries sustained are not subject to dismissal by a judge before a trial due the nature or permanency of the injuries, and no sworn doctor’s statement is required to prove injuries.

The driver with a Verbal Threshold, however, can only sue for compensation if he proves his injuries fall under one of the following criteria: death, dismemberment, loss of a fetus, “significant disfigurement” or “significant scarring”, displaced fractures, or an injury deemed permanent by a doctor’s sworn statement. If a doctor or medical records don’t support the claim that these injuries are permanent, then recovering compensation for them becomes incredibly difficult. Moreover, the limitation extends to your spouse and all of your children living in your household.

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Limitations, Lawyers And Legal Action

Whether or not you caused a car accident, you are bound by the selections you made on your auto insurance policy. If you haven’t been in an accident and are concerned that your benefits will be limited if you are, you can contact your carrier to amend your policy at any time. If you’ve already been in an accident, however, you are bound by the terms that were in place at the time of the accident.

Given the complexity of insurance and personal injury laws, the statutes, limitations and exceptions that all come into play, and the fact that you may not be in the ideal mental or physical state following an accident to deal with it all, your best bet is to contact a personal injury attorney who can help you obtain the compensation you need.

If you or someone you know has been seriously injured in a car accident and you find yourself in need of a personal injury attorney, contact us to schedule a free consultation.

Our attorneys are experienced, compassionate, and dedicated to resolving your unique situation to obtain the best possible outcome for you.