In March 1999, the New Jersey State Legislature enacted significant changes to the State’s auto insurance laws. One of these changes is an option that allows you to purchase auto insurance which provides less coverage and protection than presently available, at a cost savings. This “basic” insurance policy does not provide liability coverage, and provides only $15,000 of medical coverage under most circumstances. Another important change to New Jersey’s auto insurance law heightens the standard required to recover for injuries if you select the Limitation-on-Lawsuit option, which was previously known as the Lawsuit Threshold. A third important change imposes a pre-certification requirement for treatment for certain types of injuries.
What Is The Lawsuit Threshold Or Limitation On Lawsuit Option?
If you have been injured in an automobile accident in New Jersey your ability to make a claim for non-economic loss, or pain and suffering, may be affected by the tort option which applies to you. Your claim will be controlled by either the “Limitation on Lawsuit” option or the “No Limitation on Lawsuit” option. These were previously known as the Lawsuit Threshold and the No Threshold options. No Limitation on Lawsuit/No Threshold insureds may bring a claim for any injuries sustained in an automobile accident, without regard to type or severity of injury. Persons subject to the Limitation on Lawsuit/Lawsuit Threshold are barred from asserting claims for non-economic loss unless they meet at least one of six (6) types of injuries. Purchasers of New Jersey private passenger automobile insurance are automatically subject to the Limitation on Lawsuit/Lawsuit Threshold unless they act affirmatively to “opt out” of it. A relatively small savings in a portion of the automobile insurance premium is given to those who accept the Limitation on Lawsuit/Lawsuit Threshold option. Members of the immediate family of the named insured are also subject to the named insured’s choice. It is our strongest recommendation that you choose the “No Limitation on Lawsuit”/ No Threshold option. Persons who have selected or received the “Limitation on Lawsuit”/ Lawsuit Threshold should immediately “opt out” to “No Limitation on Lawsuit”/No Threshold.
What Are The Six Types Of Lawsuit Threshold Injuries?
If you are subject to the Limitation on Lawsuit/Lawsuit Threshold, you must establish that you have sustained one of the following injuries before your claim for money damages for non-economic loss will be recognized:
- Death
- Dismemberment (loss of arms, legs, fingers, or toes)
- Significant disfigurement or significant scarring
- Displaced fracture (broken bone)
- Loss of a fetus (unborn child)
- Permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement. An injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment.
Injury Types 1 through 5 are self-explanatory, and Type 6 requires a certification by a treating physician or a board certified physician to whom the injured individual has been referred by the treating physician. Soft tissue injuries are generally recognized injuries such as strains, sprains, muscle or tendon injuries and bulging or herniated vertebral disks. The New Jersey Supreme Court has ruled that soft tissue injuries may qualify for recovery under the Lawsuit Threshold, if the these injuries are permanent and established by proof of objective evidence of injury. To meet the objective requirement, evidence must be established by test results or clinical examination and not solely based upon a patient’s complaint of pain.
If you have sustained a sprain type injury in an auto accident and are subject to the Lawsuit Threshold, your attorney will evaluate your medical proofs and claims of serious impact on your life before Stark & Stark will file a law suit on your behalf. Cases where the injured individual misses no time from work, continues to engage in all their normal activities such as softball, bowling, aerobics, gardening, or remains under active treatment with their doctor for less than 4 – 6 months, are routinely rejected by New Jersey courts; and Stark & Stark will generally decline to institute a claim for damages under these circumstances.
Even though you have selected or received the Lawsuit Threshold, it will not apply to your claim for damages when the vehicle which caused your injury is a commercial vehicle, such as a taxi, dump truck or tractor-trailer, or where the offending vehicle is an out-of-state private passenger auto whose insurance carrier does not do business in New Jersey. New Jersey Transit buses do not carry P.I.P. coverage, as opposed to privately-owned buses which do, and passengers injured while on privately owned buses are subject to the Lawsuit Threshold. Your attorney will advise you whether the Lawsuit Threshold is applicable to your claim.
There is considerable controversy whether this two-pronged analysis, called the “Oswin Test”, in recognition of the case from which it was derived, continues to apply to soft tissue claims which occur under the new, post-March 22, 1999 law. The New Jersey Supreme Court has not yet decided a soft tissue case under the new law, and lower courts have issued various, contradictory rulings. A definitive answer should be forthcoming.
Will Stark & Stark Take My Case If The Limitation On Lawsuit Option Applies To Me?
If you have sustained a non-bony, or sprain type injury in an auto accident and are subject to the Limitation on Lawsuit/Lawsuit Threshold option, your attorney will evaluate your medical proofs and claims of serious impact on your life before Stark & Stark will file a law suit on your behalf. Cases where the injured individual misses no time from work, continues to engage in all their normal activities such as softball, bowling, aerobics, gardening, or remains under active treatment with their doctor for less than 4 – 6 months, are routinely rejected by New Jersey courts; and Stark & Stark will generally decline to institute a claim for damages under these circumstances.
Even though you have selected or received the Limitation on Lawsuit/Lawsuit Threshold option, it will not apply to your claim for damages when the vehicle which caused your injury is a commercial vehicle, such as a taxi, dump truck or tractor-trailer, or where the offending vehicle is an out-of-state private passenger auto whose insurance carrier does not do business in New Jersey. New Jersey Transit buses do not carry P.I.P. coverage, as opposed to privately-owned buses which do, and passengers injured while on privately owned buses are subject to the Limitation on Lawsuit/Lawsuit Threshold. Your attorney will advise you whether the Limitation on Lawsuit/ Lawsuit Threshold is applicable to your claim.
What Does “Precertification” Mean, And What Does It Mean To Me?
The new auto insurance law, the “Automobile Insurance Cost Reduction Act”, or AICRA, mandated certain cost reductions in auto insurance premiums, which were accomplished by substantially reducing your insurance coverage and your rights. The insurance industry has long alleged that the medical benefits available under New Jersey’s No-Fault system have been over-utilized, and therefore the new law establishes medical protocols for the treatment of soft-tissue injuries to the neck and back. These protocols are to be used as guidelines only, and are not intended to replace a treating physician’s medical judgment. However, in practical application these protocols, or treatment paths, have created obstacles for physicians seeking to render treatment to automobile accident victims. The law requires that after 10 days has passed since the accident date, a care provider must obtain pre-certification, or prior approval, from the insurance company in order to be fully paid for reasonable and necessary medical care rendered to an auto accident victim. The law also established a new arbitration system for the resolution of conflicts over whether medical treatment is medically necessary.
