New Jersey is one of 12 states with an insurance law designed to reduce auto accident lawsuits. A person suffering bodily injury or property damage in a crash must first turn to their own insurance company for compensation. The law requires all auto policies to provide coverage for the policy holder and their household members for certain types of losses up to the specified coverage limits, without regard to anyone’s fault for the accident.

Personal Injury Protection (PIP) provides immediate coverage for medical bills, including expenses like surgeries, doctor visits, prescription medications, physical therapy and, in some cases, long-term rehabilitative care. PIP coverage extends to lost income due to being unable to work because of accident-related injuries. PIP also may cover essential services like household help if an injured party cannot perform routine tasks.

New Jersey offers two types of auto insurance policies, each with varying PIP coverage levels. The Basic Policy is a limited, lower-cost option that provides minimal coverage, including $15,000 in PIP and minimal liability protection. This policy appeals to those seeking only the bare essentials. But it does not allow for the injured party to sue another party for damages.

In contrast, the Standard Policy offers more comprehensive protection with higher PIP limits (up to $250,000) and a range of liability and uninsured motorist coverage options. For catastrophic injuries, such as brain injuries, spinal cord damage and other severe harm, PIP coverage may pay up to $250,000 regardless of the policy's selected limit. 

When purchasing a Standard Policy, policyholders must decide whether they want to retain their unlimited right to sue or opt for a limited right to sue, which reduces premiums. Under the limited right to sue, a policyholder can file a lawsuit for non-economic damages, such as pain and suffering, only if they suffer from a "serious injury" as defined by state law. Serious injuries include the following:

  • Death

  • Dismemberment

  • Significant disfigurement or scarring

  • Loss of a fetus

  • Permanent injury (one that will not heal to function normally)

  • Displaced fractures (those requiring medical intervention beyond casting)

Otherwise, the injured party is limited to recovering costs under their PIP coverage. A qualified N.J. automobile injury attorney can advise you the availability of lawsuit in your personal case.

The choice between a limited and unlimited right to sue is significant because it affects both the policy’s cost and the legal options available after an accident. Choosing the limited right to sue can reduce premiums by about 15 to 30 percent, making it more affordable. However, the cost savings may be far outweighed by having full recourse to sue for injuries without meeting the serious injury threshold.

Brown, Novick & McKinley Attorneys at Law in Woodbury takes pride in providing residents of New Jersey with strong representation in automobile accident cases. To schedule a free consultation with one of our highly qualified lawyers, call 866-942-4909 or contact us online.