Lawsuit Waiver In Nj Auto Insurance: What's The Default Setting?

In New Jersey, auto insurance is mandatory, and there are two main types of policies: the Standard Policy and the Basic Policy. The Standard Policy is the most popular choice and offers more comprehensive coverage, while the Basic Policy is a more affordable option with limited benefits. Both policies include the option to purchase additional protection.

When it comes to lawsuits, New Jersey is a no-fault state, which means that auto insurance policies provide personal injury protection (PIP) to cover medical expenses and lost wages in the event of an accident, regardless of who is at fault. However, this also means that victims typically cannot sue at-fault parties for certain damages. This is known as the lawsuit threshold, and it is important to understand when selecting an insurance policy or considering a lawsuit after an accident.

The lawsuit threshold is a limitation on the right to sue after an auto accident and is included in many New Jersey auto insurance policies. It prevents plaintiffs from suing for non-economic losses, such as pain, suffering, emotional distress, and loss of enjoyment of life. In exchange, insured parties receive compensation for their medical expenses through an insurance claim, regardless of fault.

The Basic Policy includes the Limited Right to Sue option (also known as the Limitation on Lawsuit option), which is automatically included unless the policyholder actively chooses to opt-out. This option offers a small savings on insurance premiums but severely limits the ability to sue for injuries sustained in an accident.

On the other hand, the Standard Policy offers two options: the Lawsuit Threshold Provision (the default option) and the No Lawsuit Threshold Provision. The former limits the right to sue and results in lower premiums, while the latter allows for the unlimited right to sue at the cost of higher premiums.

It is important to carefully consider your needs and understand the terms and conditions of your insurance policy, especially regarding the lawsuit threshold, to ensure you are adequately protected in the event of an accident.

The 'No Limitation on Lawsuit' policy

In New Jersey, there are three types of automobile insurance policies available: a No Limitation on Lawsuit Policy (also known as a Zero Threshold policy), a Limitation on Lawsuit Policy (also known as a Verbal Threshold policy), and a Mini-Policy (also known as a Basic Policy).

The No Limitation on Lawsuit Policy provides the greatest level of security to you and your family members. It permits claims for all auto accident injuries, regardless of the nature or extent of the injuries. This policy does not require a sworn statement from your doctor(s) certifying that the injuries are sufficient to satisfy the verbal threshold statute. It is also not subject to dismissal by a judge due to the nature or permanency of the injuries before trial. The No Limitation on Lawsuit Policy eliminates the defence of a lack of permanency as a total bar to recovery. However, it costs more than the mini-policy and the limitation on lawsuit policy.

When purchasing automobile insurance in New Jersey, it is important to choose the No Limitation on Lawsuit option. By choosing the Verbal or Limitation on Lawsuit Threshold option, you will save a small amount on your insurance premium, but you will severely limit your ability to bring a lawsuit for injuries sustained in an automobile accident. This limitation applies not only to the policyholder but also to all immediate family members (spouse, children, and step-children) living in your household.

If you are subject to the No Limitation on Lawsuit option, you may bring a claim for any injuries sustained in an automobile accident without regard to the type or severity of the injury. This option is particularly important if you want to maintain your rights to sue for your injuries.

If you are a named insured that chose a zero or no lawsuit threshold for a standard policy, you will not be held to the lawsuit threshold. This also applies to your spouse and your children who live in the same household as you.

It is always advisable to select the No Limitation on Lawsuit option (also known as no threshold or zero threshold) when purchasing or renewing your car insurance. It permits you to make a claim or file a lawsuit against a careless driver for any and all personal injuries without having to meet any of the six types of injuries.

The 'Limitation on Lawsuit' policy

In New Jersey, there are three types of automobile insurance policies available: a No Limitation on Lawsuit Policy, a Limitation on Lawsuit Policy, and a Mini-Policy.

The Limitation on Lawsuit Policy, also known as a Verbal Threshold Policy, is less expensive than the No Limitation on Lawsuit Policy. This policy severely limits your ability to bring a lawsuit for injuries sustained in a New Jersey automobile accident. It is important to note that this limitation applies not only to the policyholder but also to all immediate family members (spouse, children, and step-children) living in the same household.

If you choose the Limitation on Lawsuit Policy, you will be required to provide a sworn statement from your doctor(s) when filing a lawsuit, certifying that your injuries meet one of the six criteria mandated by the Verbal Threshold Statute. These criteria include:

• Dismemberment (loss of a body part)
• "Significant disfigurement" or "significant scarring" (significant refers to the subjective view of an observer, not the injured person)
• Displaced fracture (simple fractures do not satisfy the threshold unless they cause a permanent injury after healing)
• "Permanent injury" within a reasonable degree of medical probability

It is important to understand that if you fail to choose between the Limitation on Lawsuit Policy and the No Limitation on Lawsuit Policy, the Limitation on Lawsuit Policy will be imposed by default. This policy option may not be suitable for everyone, especially those who want to maintain their right to sue for injuries sustained in an automobile accident.

The 'Mini-Policy' or 'Basic Policy'

The Mini-Policy or Basic Policy is one of the three types of automobile insurance policies available in New Jersey. The Basic Policy is a legal requirement for all drivers in the state and can be purchased through any licensed insurance producer in New Jersey.

The Basic Policy is a more affordable option for those with fewer family responsibilities and fewer assets to protect. It is also a good option for younger drivers who are just starting work and may not be able to afford more comprehensive coverage. However, it is important to note that the Basic Policy offers less protection and limited benefits compared to the Standard Policy.

The Basic Policy provides property damage limits of $5,000 per accident and personal injury protection (PIP) of $15,000 per person. It does not include bodily injury coverage, but this can be added as an option by some companies. With this policy, drivers automatically have a limited right to sue. It is important for drivers to evaluate their circumstances and ensure that this policy provides sufficient protection for their needs.

The Basic Policy includes the Limited Right to Sue option, also known as the Limitation on Lawsuit option. This means that drivers can only sue for economic damages, such as medical expenses and lost wages, and not for non-economic losses, such as pain and suffering.

While the Basic Policy may be a more affordable option, it is important to consider the risks associated with limited liability coverage. If you are sued, you may be responsible for paying for pain, suffering, and other personal hardships caused to others. Additionally, your assets may be at risk, and you may have money deducted from your wages if a judgment is entered against you.

In summary, the Mini-Policy or Basic Policy is a cost-effective option for drivers in New Jersey with minimal family responsibilities and assets. However, it is important to carefully consider your circumstances and needs before choosing this policy, as it offers limited coverage and benefits.

The 'Limited Right to Sue' option

In New Jersey, drivers are required to carry at least a "Basic Policy" car insurance, which includes $5,000 in Property Damage Liability coverage and $15,000 in Personal Injury Protection (PIP) coverage. The Basic Policy does not include or require bodily injury liability coverage, but it can be added for $10,000.

The Basic Policy offers a "Limited Right to Sue" option, which means that the injured person can only pursue legal action against the at-fault driver if the accident caused them to suffer:

• Significant disfigurement
• Significant scarring
• A displaced fracture
• Permanent injury (meaning the affected body part has not healed to allow normal function and is not expected to)

If the impact of the accident meets this threshold, the injured person gains the right to file a third-party car insurance claim or personal injury lawsuit against the at-fault driver, allowing recovery of "pain and suffering" damages and other non-economic losses.

The Limited Right to Sue option is cheaper than the "Unlimited Right to Sue" option, but it also means giving up the right to hold the at-fault driver responsible for your "pain and suffering", unless the accident is one that qualifies for stepping outside the restraints of a no-fault/PIP claim.

The No Right to Sue option

In New Jersey, motorists have the option to choose between a basic policy and a standard policy for their auto insurance. The standard policy is more expensive but includes bodily injury liability starting at $15,000 per person and $30,000 per accident. The basic policy, on the other hand, is a no-fault plan that requires a minimum of $5,000 in property damage liability and $15,000 in personal injury protection (PIP) per person, per accident.

Under the standard policy, you have the option to choose between a "limited right to sue" option and an "unlimited right to sue" option. The limited right to sue option means that you can only sue for non-economic losses, such as pain, suffering, emotional distress, and loss of enjoyment of life, when you suffer a serious injury. This is also known as the "No Right to Sue" option or the "Verbal Threshold" option.

The Verbal Threshold option severely limits your ability to bring a lawsuit for injuries sustained in an automobile accident. If you choose this option, you will save a small amount on your insurance premium, but you will give up your right to sue for injuries. This limitation applies not only to the policyholder but also to all immediate family members (spouse, children, and step-children) living in the same household.

If you choose the Verbal Threshold option, you are not permitted to recover any damages for your injuries unless you can prove, with objective evidence, that your injuries meet at least one of the following criteria:

• Dismemberment (loss of a body part)
• Significant disfigurement or significant scarring (significant is defined as the subjective view of an observer, not the injured person)
• Displaced fracture (simple fractures do not satisfy the threshold unless they cause a permanent injury after healing)
• Permanent injury within a reasonable degree of medical probability

It is important to note that if you do not expressly choose the "unlimited right to sue" option, you will receive the "limited right to sue" option by default. Therefore, if you want to retain your full right to sue, you must specifically instruct your insurance agent, broker, or carrier in writing to provide the unlimited right to sue option.

By choosing the "No Right to Sue" option, you give up your right to seek compensation for non-economic losses, but you will still be eligible for compensation for your medical expenses and lost wages through your insurance claim, regardless of fault. This can provide you with quick compensation without having to go through a lengthy legal process.

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