New Jersey’s auto insurance system is famously complicated. If you’re injured in a car crash in Bergen or Passaic counties, you may be unsure about your rights.
The state uses a “no-fault” system, meaning that, regardless of who caused the crash, you must initially file your claim for injury treatment through your own insurance company.
Understanding PIP
Personal injury protection (PIP) is the core of New Jersey’s no-fault law. All New Jersey drivers must carry this mandatory coverage. PIP pays for your initial accident-related medical costs, whether or not the accident was your fault.
PIP coverage pays for a variety of expenses up to your policy limit:
- Medical expenses, including hospital bills and rehabilitation
- Nonmedical benefits, such as lost wages and essential services
- Death benefits
PIP primarily covers medical expenses. While it can also include nonmedical benefits like lost wages and essential services, these are subject to specific, low statutory sub-limits (e.g., $100 per week for lost wages) unless the policyholder purchased optional, higher “additional PIP” or “extra PIP” coverage.
The main benefit of PIP is that it gives you immediate access to funds for necessary medical care. You don’t have to wait for the insurance companies to determine who was at fault. However, it is essential to know that PIP does not cover noneconomic damages like pain and suffering.
When can you sue the at-fault driver?
Most New Jersey drivers opt for the “limitation on lawsuit” option, also known as the “verbal threshold.” They select this option to save money on their insurance premiums. However, under this option, you agree not to sue the at-fault driver for pain and suffering, except in certain situations.
To file a lawsuit against the at-fault driver for noneconomic damages, your injuries must meet the strict “serious injury threshold.” The law defines a serious injury by specific categories:
- Death
- Dismemberment
- Significant disfigurement or scarring
- Displaced fracture
- Loss of a fetus
- Permanent injury (an injury that will not heal to function normally)
You can also choose “no limitation on lawsuit” when purchasing your policy. This option costs more in premiums, but it allows you to sue the at-fault driver without needing to meet the serious injury threshold.
Why is a lawyer’s help crucial?
The New Jersey system helps resolve smaller claims quickly by keeping them out of the court system. However, if you suffer severe injuries, you must deal with the complicated lawsuit threshold, in addition to gathering crucial evidence related to the accident.
Determining if an injury meets New Jersey’s strict threshold and challenging an insurer’s decision requires the knowledge and experience of a skilled car accident attorney. Understanding these policy choices is essential to protecting your legal rights after a car crash.
