Insurance Issues - Threshold
New Jersey Statute § 39:6A-8 - Tort exemption, limitation on the right to noneconomic loss
In an effort to reduce the cost of automobile insurance, some states have placed restrictions on people's ability to sue for non-economic losses. Those states have established a "threshold," or a level of "pain and suffering," that must be met before a person can recover damages for non-economic loss. The threshold varies from state to state.
- Some states have made their threshold a mandatory requirement that everyone must meet to recover damages.
- Other states have adopted a dual threshold requirement, allowing the consumer to choose between 2 or more options that control their individual right to recover damages.
New Jersey gives the consumer a choice regarding the right to sue for pain and suffering. When buying insurance, there are two choices:
- Zero threshold option; or
- Lawsuit threshold.
There is a major difference between the two types.
Zero Threshold
The zero threshold option allows an injured person to recover damages no matter what type of injury was suffered, as long as it is possible to successfully prove the case in court. This applies to:
- People who select this type of coverage; and
- People who do not own an automobile and do not live with anyone who owns an automobile.
Maintaining the right to sue for pain and suffering for any type of injury will increase the amount a person will pay for automobile insurance coverage.
Lawsuit Threshold
The lawsuit threshold, or, as it is more commonly called, “verbal threshold,” limits the right to recover damages for pain and suffering to very specific types of injuries which the Legislature has decided are permanent or serious injuries. This means that if an injured person has an automobile insurance policy with the lawsuit threshold, that person can only sue for pain and suffering if he or she has suffered one of the following types of injuries.
- Death;
- Dismemberment (loss of a part of the body, like a leg, arm or finger);
- Significant disfigurement or significant scarring;
- Displaced fractures (fractures that physically move the bone);
- Loss of a fetus;
- Permanent injury within a reasonable degree of medical probability other than scarring or disfigurement.
An injury is considered to be permanent if the body part or organ has not healed to function normally, and will not heal to function normally without additional medical treatment.
- If a person does not have automobile insurance, but lives with someone who does, the law says that the person has the same threshold as the person who does have an insurance policy
- The lawsuit threshold option saves a person money on automobile insurance, in exchange for limiting his or her right to sue for pain and suffering.
Meeting the Threshold
In order to meet the verbal threshold limitations imposed by law, a person filing a lawsuit (plaintiff) must:
- File a certification from a licensed treating physician or board certified licensed physician, stating under oath that the plaintiff meets one of the elements of the lawsuit threshold; and
- Provide the results from objective medical tests performed by the physician that support the certification.
If this is not done within 60 days of receiving an answer or response from the defendant to the lawsuit, the lawsuit will be dismissed.
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