New Jersey’s No-Fault Insurance Laws for Car Accidents

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New Jersey partially uses a no-fault insurance system. People who are involved in a car accident in New Jersey cannot always bring a personal injury lawsuit against an at-fault party. However, there are certain times when victims can still pursue a personal injury lawsuit.

No-Fault Insurance

In New Jersey, no-fault automobile insurance is mandatory. Everyone must obtain this type of insurance. This type of insurance allows a person to be covered no matter who was at fault for the accident. The insurance company covers the victim’s economic losses even if he or she was responsible for the accident. This means the insurance company pays the medical bills. The insurance company also covers some wage loss and essential services. It covers the driver who was injured in the accident as well as family members or other passengers who were injured in the accident.

States like New Jersey that implement no-fault insurance systems are often motivated to help prevent expensive litigation. It can also simplify the process when a claim is filed. In an at-fault system, there may be additional steps that are taken to identify which party was negligent, if the other party was partially at fault and apportioning the fault between the parties. Insured drivers benefit from the system by avoiding the usual denials that occur in an at-fault system. In these states, litigation is more common because it must be determined which insurance company should pay the medical expenses and other losses.

Limitations on Personal Injury Cases

Insured drivers in at-fault states may face limitations on being able to pursue a personal injury claim. Insured drivers must follow the state rules regarding when they can file such a claim and what damages they can pursue. Many decisions are also limited by the decisions that the insured made when he or she purchased insurance. He or she may have purchased a minimal amount of coverage for medical expenses and lost wages. The state minimum is $15,000. Additionally, the insured may have decided whether the insurance company has to pay for the damage to the vehicle.

Basic Car Insurance Policy

The minimal requirement for drivers in New Jersey is to carry a basic policy. This includes $5,000 in property damage liability coverage that covers the repairs for the other vehicle involved in the accident and $15,000 in personal injury protection that covers this amount per person, per accident. The $15,000 amount covers up to $250,000 for serious injuries like spinal cord injuries. The basic policy does not include liability coverage for medical expenses although drivers can add more than the minimal amount of coverage. If a driver is responsible for an accident, he or she can be held liable for the amount of medical expenses not covered by his or her own personal injury protection policy.

Limited Right to Sue

If a person has the basic policy and is injured in a car accident, the medical expenses are paid under the personal injury protection aspect of the policy if the claim is approved. The driver and others covered under the basic policy are subject to a limited right to sue. He or she can only sue the at-fault party if the accident resulted in serious injuries, which are defined as a displaced fracture, significant disfigurement, loss of a body part, permanent injury, loss of a fetus, significant scarring or death.
In a personal injury lawsuit, the victim can seek any excess over the policy limit for medical expenses and lost wages. Additionally, the victim can seek pain and suffering damages, which are not available under the personal injury protection side of the policy.

Option to Sue

To avoid the limited right to sue, the insured must opt for this choice when purchasing automotive insurance. This often costs more than the basic policy but allows a person the right to pursue a lawsuit against the at-fault party for expenses that very often exceed the limits of the personal injury protection aspect of the policy.

Problems with Your Own Insurance Company

Unfortunately, having a no-fault system does not eliminate potential problems between the insured and his or her own insurance company. In an attempt to minimize their own losses, the insured’s own insurance company may deny a claim based on pre-existing injuries, quoting unnecessary tests or treatment or a medical professional that examined the insured stating that he or she does not have an injury.

A car accident lawyer can provide legal representation against your own insurance company or an at-fault driver when possible.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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