Many of the people who drive in New Jersey live out of state. I am one of those people. While I live in Pennsylvania, 90% of the driving I do is in New Jersey. Under these circumstances, I wanted to find a way to take advantage of Pennsylvania’s lower auto insurance premiums while avoiding New Jersey’s restrictive limitation on lawsuit or “verbal threshold” laws.
The problem was New Jersey’s Deemer Statute, N.J.S.A. 17:28-1.4, which applies to out-of-state drivers who are injured in accidents in New Jersey. Under the Deemer Statute, if you are an out-of-state resident and you are hurt in an accident here in New Jersey, you will be subject to New Jersey’s restrictive limitation on lawsuit or “verbal threshold” laws if your auto insurance company is licensed to transact business in the State of New Jersey. Being subject to New Jersey’s “verbal threshold” is a bad thing. If you are subject to the “verbal threshold,” you have a limited right to be compensated if you are injured in an accident.
So if you live outside New Jersey, but do a lot of driving here, is there a way to avoid New Jersey’s restrictive “verbal threshold”? The answer is yes. The first thing you should do is follow the link below. It will take you to a list of all of the auto insurance companies that are licensed to transact business in New Jersey. Look for your auto insurance company. If it is not on the list, you will not be deemed subject to New Jersey’s “verbal threshold” if you are injured in an accident in New Jersey.
http://www.state.nj.us/mvc/pdf/Vehicles/insurance_codes.pdf
If you do see your auto insurance company on the list, you can choose to change to another company that is not on the list, thereby sidestepping New Jersey’s Deemer Statute and “verbal threshold” in the event you are injured in an accident in the Garden State. I would suggest calling your insurance agent and asking for a list of auto insurance companies that do not offer policies in New Jersey.
If you live outside New Jersey, but have auto insurance through a company that is on New Jersey’s list of licensed companies, you will be deemed subject to the “verbal threshold” by way of the Deemer Statute. This is true, even if you chose the no limitation on lawsuit option when you purchased your auto insurance policy in your home state.
This may seem unfair, but there is good news. There are many insurance companies out there that do not transact business in New Jersey. In fact, I recently saw an ad in a newspaper for a Pennsylvania based insurance company that does not transact business in New Jersey. The ad offered Pennsylvania residents who drive primarily in New Jersey, like me, a way around New Jersey’s Deemer Statute. Simply buy a policy through an insurance company that is not licensed to transact business in New Jersey, and if you are injured in an accident in the Garden State, neither the Deemer Statute nor New Jersey’s “verbal threshold” will apply.
In the end, this advertisement made a lot of sense to me. If I were an out-of-state resident who drives primarily in New Jersey (which I am) and I wanted to avoid the headaches and restrictions that come with New Jersey’s Deemer Statute and “verbal threshold” (which I do), I would find an auto insurance company that is not on New Jersey’s list of licensed companies (which I did).
If you want to discuss New Jersey’s Deemer Statute or “verbal threshold” laws in more detail, or how they might affect you, feel free to contact Stark & Stark. And as always, stay safe out there.
