Because of the way insurance works in New Jersey, the best time to think about whether you want to sue is before you have your accident. Decades ago, in an effort to simplify claims, New Jersey adopted no-fault auto insurance. Under the no-fault plan, policyholders purchase person injury protection (PIP) and file claims with their own insurer, without having to prove someone else is liable for the accident. Only after they reach the limits of their PIP coverage do injured parties have to seek compensation from another driver’s liability insurance.
While no-fault law cut down on negligence lawsuits, it also tended to create adversarial relationships between policyholders and their own insurers, who were often just as slow to pay claims for their own customers as they had been for third parties. But no-fault law also shortchanges injured parties when it comes to recovery for pain and suffering.
When you purchase a New Jersey auto insurance policy, you have two options: unlimited right to sue and limited right to sue. Neither affects your right to recover for your economic losses, such as medical bills or lost income, but they greatly affect your right to claim pain and suffering and other noneconomic losses, such as loss of quality of life, loss of enjoyment of life, and loss of consortium.
With the unlimited right to sue, you can file a claim for pain and suffering for any physical injury you sustain. With limited right to sue, you get the immediate benefit of lower premiums, but if you get into an auto accident, you cannot recover for pain and suffering unless your injury is “permanent” within the meaning of the law. Thus, you can only sue for pain and suffering if your injury involves:
This law was enacted to encourage quick settlements of insurance claims and to keep minor injuries from being litigated in court. However, it ignores the reality we see in our practice: injuries that do not qualify as permanent can still require a long convalescence and inflict significant pain. The law also has the unintended consequence of discriminating against the poor, who are often compelled to surrender their right to sue in exchange for affordable car insurance.
At Seigel Law, we strongly recommend retaining your full rights to your day in court, but we realize that each driver must make decisions based on their own economic circumstances.
Seigel Law represents victims of auto accidents in Bergen County and throughout New Jersey. Contact us online or call 201-444-4000 today for a free consultation and case evaluation.