New Jersey’s ‘Verbal Threshold’ in Auto Insurance Policies

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When shopping for car insurance in New Jersey, many drivers focus on price and coverage limits, often overlooking one of the most critical aspects of their policy: the verbal threshold, also known as the limitation on lawsuit option. While this option can help you lower your premium, it can also severely limit your ability to file a personal injury lawsuit after a car accident.

This article will break down everything you need to know about the verbal threshold in New Jersey, including how it works, what injuries qualify, and how to make the right choice for your insurance policy.

Understanding New Jersey’s No-Fault Insurance System

New Jersey is a no-fault insurance state. This means that if you’re injured in a car accident, your own insurance pays for your medical treatment, regardless of who caused the accident. This coverage is known as Personal Injury Protection (PIP), and it’s a mandatory component of all NJ auto insurance policies.

While this system is designed to streamline the process of receiving medical care and reduce the burden on the court system, it also comes with significant limitations. One of the most important limitations relates to your right to sue the at-fault driver for non-economic damages such as pain, suffering, and emotional distress.

Whether or not you can file such a lawsuit depends on the lawsuit threshold option you chose when you purchased your policy.

Verbal Threshold vs. Zero Threshold: What’s the Difference?

New Jersey drivers are required to choose between two types of lawsuit thresholds on their auto insurance policies:

Limitation on Lawsuit (Verbal Threshold)

If you choose the limitation on lawsuit, you are agreeing to limit your right to sue for non-economic damages unless your injuries meet a specific legal standard. This option typically lowers your insurance premium but restricts your ability to seek compensation for pain and suffering unless your injuries fall into one of six serious categories defined by law.

No Threshold (Zero Threshold or Unlimited Right to Sue)

With the zero threshold option, you retain the unrestricted right to sue the at-fault driver for non-economic damages, regardless of the severity of your injuries. This option provides maximum legal protection but usually results in a higher insurance premium.

Injuries That Qualify Under the Verbal Threshold

If your policy includes the limitation on lawsuit, you may only file a personal injury lawsuit for non-economic damages if your injuries fall into one of the following six legally defined categories:

1. Dismemberment – Loss of a body part such as a hand, arm, or leg.
2. Significant disfigurement or scarring – Noticeable and lasting damage to appearance.
3. Displaced fractures – A bone fracture where the bone has moved out of place.
4. Loss of a fetus – Miscarriage caused by the accident.
5. Permanent injury – A body part or function that has not healed and will not return to normal function with further medical treatment.
6. Death – Fatal injuries that allow surviving family members to file a wrongful death claim.

If your injuries do not fall into one of these categories, you may not be able to file a lawsuit for pain and suffering, even if the accident was entirely the other driver’s fault.

Why So Many Drivers Have the Verbal Threshold Without Realizing It

One of the most common problems with the verbal threshold is that many policyholders choose it without fully understanding its implications. Insurance companies often present this option as a way to save money on premiums, and it’s frequently selected by default unless you actively request the zero threshold option.

Because of this, countless drivers are unaware they’ve signed away their right to sue for non-economic damages until they’re injured and attempt to pursue legal action.

Benefits and Risks of the Verbal Threshold

There are some potential advantages to choosing the verbal threshold, but the drawbacks can be severe if you’re involved in an accident.

Benefits of Choosing the Verbal Threshold

Lower Premiums

One of the most appealing features of the verbal threshold is that it can reduce your monthly and annual insurance costs. This is especially attractive for younger drivers, low-mileage drivers, or individuals on a tight budget.

Immediate Cost Savings

Choosing the verbal threshold can lower your upfront insurance bill, sometimes by hundreds of dollars annually.

Risks of Choosing the Verbal Threshold

Limited Legal Rights

You may lose the ability to sue for pain and suffering unless your injuries meet the strict legal requirements.

Unexpected Financial Losses

Many people assume they’ll be able to sue if the accident wasn’t their fault, only to find out their injuries aren’t “serious enough” under the law.

Higher Out-of-Pocket Costs in Serious Accidents

If you suffer a serious but non-qualifying injury, you could be stuck with out-of-pocket costs and no legal recourse for compensation beyond what PIP pays.

Choosing the Right Option: Verbal or Zero Threshold?

Whether you should choose the verbal threshold or opt for the zero threshold depends on several factors, including your risk tolerance, driving habits, and financial priorities.

When the Verbal Threshold Might Be Right for You

1. You are primarily concerned with keeping insurance premiums low.
2. You drive infrequently or only for short distances.
3. You have comprehensive health insurance and are less concerned about non-economic losses.
4. You are comfortable accepting more legal risk in exchange for lower premiums.

When the Zero Threshold Might Be the Better Choice

1. You want to preserve your right to sue regardless of injury type.
2. You drive frequently or are at a higher risk of being involved in a collision.
3. You don’t want to risk being unable to sue for pain and suffering.
4. You or your family members may be more vulnerable to the consequences of even “minor” injuries.

Ultimately, the choice should be made after carefully reviewing your personal circumstances and the potential consequences of each option. It’s also wise to consult with a knowledgeable insurance agent or attorney if you’re unsure.

Common Problems Faced by NJ Drivers with the Verbal Threshold

Drivers who choose the verbal threshold often experience a number of frustrations and legal setbacks after being involved in an accident. Some of the most common issues include:

1. Lack of awareness: Many people are shocked to learn they selected the limitation on lawsuit option without understanding what it means.
2. Inability to sue: Drivers often find they are barred from pursuing pain and suffering claims for what they believed were serious injuries.
3. Misleading assumptions: Policyholders may assume their injuries automatically qualify without realizing how narrow the law’s definition of “serious” is.
4. Insurance denial of lawsuits: Even when a driver feels they’ve suffered significantly, insurance adjusters may reject pain and suffering claims due to the verbal threshold restrictions.
   

Real-World Scenario: The Impact of the Verbal Threshold

Imagine a driver named John is rear-ended while stopped at a red light in Jersey City. He suffers neck and back injuries that require physical therapy and pain management, and he is out of work for several weeks. Although his pain is real and his lifestyle is disrupted, he is told he cannot sue because his injuries don’t fall into one of the six qualifying categories.

If John had selected the zero threshold option on his policy, he would have been able to pursue a lawsuit against the at-fault driver for pain and suffering. But because he chose the verbal threshold to save on premiums, he is left without that legal option.

Frequently Asked Questions (FAQ)

What is the verbal threshold in New Jersey auto insurance?
The verbal threshold, also known as the limitation on lawsuit option, is a provision in many New Jersey auto insurance policies that limits your ability to sue for pain and suffering after a car accident. If your policy includes this option, you can only file a lawsuit for non-economic damages if your injuries fall into one of six specific categories defined by New Jersey law.

Can I still sue if I have the verbal threshold?
Yes, you can still sue, but only under certain conditions. Your injuries must meet the legal criteria established under the verbal threshold. These include permanent injury, significant disfigurement or scarring, displaced fractures, dismemberment, loss of a fetus, or death. If your injury does not fall into one of these categories, you typically cannot sue for pain and suffering.

What kinds of injuries qualify under the verbal threshold?
Injuries that qualify must be serious and long-lasting. Common qualifying injuries include broken bones that are displaced, permanent nerve damage, traumatic amputations, severe facial scars, or any injury that a physician can confirm will not heal to its normal function. Soft tissue injuries, minor whiplash, or temporary pain typically do not meet the legal standard required to bypass the threshold.

Why would someone choose the verbal threshold if it limits their rights?
Many drivers choose the verbal threshold because it usually results in lower insurance premiums. It can be a cost-saving option for individuals who rarely drive or are trying to reduce their monthly expenses. However, many people select it without fully understanding what it means, often during the initial policy purchase or through online quote systems where it’s selected by default.

Can I change my lawsuit threshold option later?
You can change your lawsuit threshold option, but typically only when your auto insurance policy is up for renewal. It’s important to review your options before each renewal period to ensure your policy reflects your current needs and risk tolerance.

Contact The Epstein Law Firm, P.A., Today

If you’ve been involved in a car accident in New Jersey and are unsure how the verbal threshold affects your ability to sue, don’t wait to get the answers you need. Understanding your rights—and the fine print of your insurance policy—can make a major difference in your ability to recover the compensation you deserve.

An experienced New Jersey personal injury attorney can review your policy, assess your injuries, and guide you through your legal options. Whether you’re dealing with denied claims, uncertainty about qualifying injuries, or simply need help navigating your next steps, legal support is just a call away.

Contact The Epstein Law Firm, P.A., today for a free consultation. Get clarity, protect your rights, and take the first step toward securing the compensation you may be entitled to.