Saving money on car insurance is a major advertising theme among insurance companies these days.
What New Jersey drivers may not know, however, is that selecting a Verbal Threshold rather than a No Threshold option may save them a few dollars on their car insurance rate, but it could cost them a significant amount of money if they are involved in an accident. Most drivers are not even aware of which option is in place on their current policy.
Here are five things you may not know about the Verbal Threshold that may inspire you to check with your insurance company to find out more about the coverage you currently have in place.
1. What is the difference between Verbal Threshold and No Threshold? All New Jersey drivers are required to select either the Verbal Threshold (or the Limitation on Law Suit Threshold) or the No Threshold (or the No Limitation on Law Suit Threshold). Drivers involved in an accident who selected the No Threshold option are permitted to sue for unlimited damages, including pain and suffering and other non-economic harm.
For those who select the Verbal Threshold, the right to sue is limited to a few specific categories of injuries, including loss of a body part, significant scarring, a displaced fracture, or a permanent injury. If your medical records do not support your claim that your injuries fall into one of these categories, you will not be able to recover compensation for your injuries.
2. What happens if my child is injured in the accident? All immediate family members living in your household, including children, spouse, and stepchildren, are bound by the option on your insurance policy. So if you selected the Verbal Threshold and your child’s injury does not fall into one of the permitted categories, your child is also prohibited from recovering damages.
3. How can I prove that my injury is permanent so that I can file a permitted claim? If you file a lawsuit on the basis of a permanent injury, a doctor must provide a sworn statement that supports your claim, and many doctors are hesitant to certify that an injury is permanent. Insurance companies who cover the defendants in these types of cases will pursue them very aggressively, and can sometimes obtain a dismissal from a judge simply based on medical records.
4. Why does New Jersey law have the Verbal Threshold? In the 1980’s, New Jersey automobile law required that drivers select a dollar amount threshold that was required to be met in medical costs in order to permit them to sue for non-economic damages, like pain and suffering. A lower dollar amount threshold usually resulted in a higher premium for the coverage, and policies with a higher dollar amount threshold carried lower premiums.
If a driver in an accident had a higher threshold, he might seek more treatment than was truly necessary in order to overcome his dollar amount threshold, so that he could then also sue for pain and suffering. The New Jersey legislature introduced the Verbal Threshold in 1988 to prevent plaintiffs from over-treating injuries in order to be eligible to sue for non-economic damages.
5. When does the Verbal Threshold not apply?Out of state residents injured in accidents who carry coverage through insurance carriers not qualified to do business in New Jersey are not bound by the Verbal Threshold. Also, anyone who is a non-immediate family passenger or permitted driver who is not required to maintain their own coverage, as well as any drivers who select No Threshold on their policy, are not affected by the Verbal Threshold.
When you or a family member has been involved in a car accident your life stops and then changes from that day forward. The lawyers at Schibell Law have the experience one needs when faced with a life changing situation. Call 732-774-1000 when you need the guidance of an experienced law firm.
