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Exceptions to the Verbal Threshold in New Jersey

Posted on: June 5, 2023

When purchasing auto insurance, choosing the right coverage is critical to the care and expenses you receive should you be injured in an accident. Nearly 300,000 car accidents occur yearly in New Jersey, resulting in approximately 55,000 serious injuries.

Suffering injuries in a car accident can have lasting effects on your quality of life, finances, and ability to work. New Jersey requires all drivers to carry personal injury protection (PIP) insurance, and, by law, each driver must first use their own PIP coverage for expenses following an accident.

When your expenses exceed your PIP coverage, you may be entitled to additional compensation through the driver’s insurance by bringing a lawsuit. However, the right to file suit can be complicated due to New Jersey’s law of “verbal threshold.”

The verbal threshold is an option within insurance policies that limits your ability to sue for certain injuries under the Automobile Insurance Cost Reduction Act (AICRA). Lawmakers were unwilling to allow the option of waiving mandatory insurance coverage, so instead created the verbal threshold option, allowing motorists to self-waive coverage for non-economic damages, such as pain and suffering.

Choosing the verbal threshold significantly reduces the cost of insurance premiums but limits the non-economic damages you can seek. The verbal threshold applies regardless of who is responsible for the accident and also includes resident family members, such as children who do not have their insurance policy.

New Jersey developed the verbal threshold option in response to drivers’ complaints of high insurance costs and insurance companies claiming those with high thresholds were abusing the system for unnecessary medical care and to sue for non-economic damages. Drivers can choose a range of verbal option coverages– the higher the threshold, the lower the premium cost. There is also a zero-threshold option that allows for unlimited damages, though it is a significant gamble of never having an accident versus having excellent coverage.

There are 11 exceptions to the verbal threshold to recover non-economic damages, even if both drivers selected the limitation on lawsuits policy option. Exceptions to the verbal threshold include:

  • The insured elected not to choose the verbal threshold option
  • Individuals not required to maintain PIP coverage
  • Out-of-state accidents
  • Residents of other states driving in New Jersey whose insurance carrier is not authorized by the state
  • Individuals injured in an accident caused by a commercial vehicle are not required to carry PIP coverage

There are medical exceptions in cases involving severe injuries, as follows:

  • Death
  • Dismemberment
  • Significant disfigurement, burns, or scarring
  • Loss of a fetus
  • Permanent injury
  • Displaced fractures

If any of the above exceptions apply, you can seek non-economic damages. The majority of exceptions are inherently obvious and require little proof. However, permanent injuries typically require significant evidence and must meet specific criteria, including:

  • Permanent loss of a bodily function or organ
  • Permanent limitation of a bodily organ or member
  • Significant limitation of a bodily function or system

You must show your injuries meet the criteria, typically through medical records detailing your hospital stay and treatment, along with specialized testing, such as MRIs, CAT scans, ultrasounds, and X-rays.

New Jersey Car Accident Lawyers at Ellis Law Can Help Determine if You Meet a Verbal Threshold Exception

If you have been injured in a car accident and have concerns about your insurance policy, speak with our New Jersey car accident lawyers at Ellis Law. Call us at 732-308-0200 or complete our online form to schedule a free consultation. Located in Freehold, New Jersey, we serve clients in Asbury Park, East Brunswick, Toms River, Middletown, Jersey City, Long Branch, Neptune, Hudson County, Union County, Essex County, Monmouth County, Marlboro, and Ocean County, as well as Brooklyn and New York City.

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