In New Jersey ‘Limitation of Lawsuit’ is also referred to as the ‘New Jersey Verbal Threshold’, but the purpose is the same: You’ve agreed as part of your insurance policy to limit your right to sue for injury in return for a lower insurance premium. The issue with people choosing the ‘Verbal Threshold’ is that it will save them a few dollars on their premium, but in the event of a serious personal injury you will be severely restricted in the type and amount you can claim in damages. This is exactly why it’s referred to as ‘Limitation of Lawsuit’. This is also why it’s so important to understand exactly what you’re agreeing to when signing any type of legally binding document.
Why It Exists
The ‘Verbal Threshold’ was created to reduce the financial burden on lower income families who struggled to pay their motor insurance premium. This was because they were asked to state a fixed dollar amount in medical costs which must be reached before they could claim for significant non-economic damages. Drivers choosing a lower dollar amount were asked to pay a higher premium, and vice versa.
This change in legislation obviously also reduced the financial burden on insurance companies, who were frequently dealing with claims for “pain and suffering”, many of them for millions of dollars. The issue with this legal provision is that most ordinary people simply focus on the lower insurance premium, not realizing they are literally signing away their right to claim for “pain and suffering” damages in the event of a serious accident.
Exceptions To The Threshold
Because this legal clause was such a dramatic change to the existing legislation there was an identified need for certain exceptions to what non-economic damages can be recovered in the event of a serious accident. These exceptions include:
- Death
- Permanent loss of a limb
- Loss of an unborn child
- Permanent loss of a major body organ, or system
- Displaced fractures
- Serious disfigurement or scarring
- Significant limitation in the use of a body organ or system
As you can see some of these exceptions are quite easily recognizable, especially in the case of death, dismemberment, or the loss of a fetus. In these situations very little medical documentation is required. With other medical issues such as fractures, or the limitation in use of an organ or body system, proving them to be an exception for your case can be far more difficult. You will need a medical professional to testify to the validity of your claim, with supporting documentation to back that up.
Family Members
The limitation of lawsuit not only includes you, but anyone else named or covered by your insurance policy. For example, in the event of your child having an accident in your home, they would also be limited by the ‘Verbal Threshold’ clause in your insurance policy. Your spouse and stepchildren are also bound by the terms of your insurance policy, meaning you would be unable to claim for any injury to your child, except if it’s for one of the more serious injuries listed above.
Please contact us today if you’re confused as to whether or not you can claim for “pain and suffering” as a result of an accident you’ve been involved in, or if you feel your injury is an exception to the “Verbal Threshold” rules.