If you’ve been injured in a car accident in New Jersey, understanding your auto insurance policy is crucial—especially how the “verbal threshold” (also called the “lawsuit threshold”) can impact your right to sue for pain and suffering. Many accident victims are surprised to learn that they may have unknowingly limited their legal options by choosing certain coverage options when buying or renewing their car insurance.
What Is the Verbal (Lawsuit) Threshold in New Jersey?
Under New Jersey law, drivers can select between two major tort options on their auto insurance: the “verbal threshold” (also called “limitation on lawsuit” or “lawsuit threshold”) and the “no threshold” (also known as “zero threshold” or “unlimited right to sue”). The verbal threshold limits your ability to sue for non-economic damages like pain and suffering unless your injuries meet specific, serious criteria. Most drivers choose the verbal threshold because it reduces their insurance premiums, but often they do so without fully understanding the consequences.
Why Do So Many People Choose the Lawsuit Threshold?
Many New Jersey residents are not aware that selecting the verbal threshold restricts their right to sue for pain and suffering after an accident. Insurance agents may not clearly explain the differences between options, and with the rise of online insurance purchases, consumers frequently choose the cheaper option without being aware of the limitations. Unfortunately, once you are injured, you may find your legal options are limited by the choice you made—sometimes unknowingly—when you purchased your policy. The biggest reason, or course, is that this policy option is cheaper. You should explore the costs and attempt to pay the higher premium as it makes a huge difference in your or a family member’s ability to recover. Insurance companies will always offer more money to someone that does not have the verbal threshold.
Our Advice: Protect Your Rights
At our law firm, we strongly recommend that New Jersey drivers select the “no threshold” or “zero threshold” option. This choice preserves your right to seek compensation for pain and suffering if you are injured in an accident, regardless of the severity of your injuries. Saving a few dollars on your premium is not worth sacrificing your legal rights in the event of a serious accident.
How the Automobile Insurance Cost Reduction Act (AICRA) Affects Your Rights
The most recent law impacting New Jersey auto insurance and the verbal threshold is the Automobile Insurance Cost Reduction Act (AICRA) of 1998. According to N.J.S.A. 39:6A-8, if you choose the verbal threshold, you can only file a lawsuit for pain and suffering if your injuries fall into one of the following categories:
- Death
- Dismemberment
- Loss of a fetus
- Significant disfigurement or scarring
- Displaced Fractures
- A permanent injury that has not healed to normal function and will not heal to normal function with further medical treatment.
All auto insurance policies in New Jersey require the consumer to choose from one of two options with respect to their right to bring a lawsuit. The two options are: (1) the lawsuit or verbal or tort threshold or (2) the no tort threshold or no lawsuit threshold. Under different policies, the tort options (your right to sue) are referred to as these various names but mean the same thing. Under option (1) you are limiting your ability to sue for certain injuries. Under option (2) you can sue for any injury.
Many clients that come into our office after an accident never had any idea they chose one of these options. Most clients cannot understand that you choose under your own insurance policy a limitation on your ability to sue someone else that causes you injury. Unfortunately, that is the law in New Jersey.
A large majority of people choose the lawsuit threshold, which limits their ability to sue for pain and suffering. People choose this option because it is cheaper, but also because insurance agents do not adequately explain the differences in the options. Furthermore, with the internet many people make these choices on line without understanding and are much more likely to choose the cheaper option. Needless to say, my advice to all consumers in New Jersey is to pick option (2), which is the no tort or no lawsuit threshold as this will not limit their right to sue.
The most recent law affecting New Jersey auto insurance and the verbal threshold is the Automobile Insurance Cost Reduction Act (AICRA) of 1998.Under AICRA, New Jersey Statutes Annotated Section 39:6A-8, residents that have chosen the verbal or lawsuit threshold can only file civil lawsuits to recover for pain and suffering damages if their injuries fall under one of the following categories: (1) death; (2) dismemberment; (3) loss of a fetus; (4) significant disfigurement or scarring; (5) displaced fractures; or (6) a permanent injury that has not healed to normal function and will not heal to normal function with further medical treatment. Category 6 is the most common issue that is fought out in the courts. For example, you can have a serious back or neck injury that does not qualify for categories (1) through (5) but is serious enough that it will not heal to normal function or be permanent in some way. Insurance companies will always fight on a Category 6 injury and many cases go to trial on this issue.
The first question in any automobile related case is whether the lawsuit threshold is applicable to you. Next, you want to determine if there is a way around having the lawsuit threshold applied to you as there are exceptions even if you have chosen the lawsuit threshold under your own policy. Summarized below are some of the different examples and categories to which the verbal threshold would and would not be applicable. Other categories and legal situations may exist in different factual scenarios and below is only a summary of the most common categories.
Verbal Threshold Applicable
Below is a list of plaintiffs or persons bringing the lawsuit to who the verbal or lawsuit threshold is applicable:
- The person with auto insurance who chooses a basic policy in New Jersey. Any family members in that insured’s household will also be subject to the lawsuit threshold.
- The person with the insurance under a standard insurance policy who elects the verbal threshold as his or her tort option.
- An immediate family member of the person with the auto insurance who has elected the verbal threshold and who is not a named insured under another policy. If the immediate family member has an automobile policy, then that person would be governed by the verbal threshold chosen by under their own policy.
- The person with auto insurance who fails to elect any tort option.
- A person who is required but fails to maintain Personal Injury Protection Coverage.
- Out of state residents injured in a car accident in New Jersey are subject to the verbal threshold automatically under the deemer statute, N.J.S.A. 17:28-1.4, if their carriers are authorized to do business in New Jersey.
- A pedestrian injured by an automobile and subject to one of the above categories.
- A New Jersey resident subject to one of the above categories and injured in an out-of-state accident.
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Verbal Threshold Not Applicable
Below is a list of plaintiffs to whom the verbal threshold is not applicable and can bring a case for pain and suffering for any type of injury:
- A named insured under a standard policy who elects the zero or no tort threshold as his tort option.
- A spouse of child residing the household of the person with insurance under a standard policy that has elected the zero or no tort threshold.
- A person who is eligible for Personal Injury Protection benefits as a permissive user, passenger or non-immediate family member of an insured and who is not required to maintain PIP coverage for accidents.
- A person who suffers an injury caused by a motor vehicle which is not an automobile covered by Personal Injury Protection benefits. This is most of the time a commercial vehicle situation such as when a commercial truck causes the accident and injuries.
- Passengers on New Jersey Transit buses and other buses not eligible for Personal Injury Protections benefits who are not named insureds electing the verbal threshold. The injured passenger in this instance could sue a driver that collided with the New Jersey Transit bus without being subject to the threshold. If, however, their claim was for negligence against the driver and New Jersey transit they would be subject to the threshold under the Tort Claims Act and the defenses under it.
- Out of state residents who are injured in New Jersey accidents and whose carriers are not qualified to do business in New Jersey.
Verbal Threshold Does Not Bar Claims For Economic Loss
Always remember that the verbal threshold only limits your ability to bring a claim for pain and suffering for non-economic damages. The verbal threshold does not limit your ability to bring a claim for economic damages. Thus, if you have significant lost wages resulting from an automobile accident, these damages are potentially recoverable.
Whether the verbal or lawsuit threshold is applicable to your lawsuit is critical as this may greatly impact your ability to bring and be successful with your case. If you are in an accident, it is critical you consult with an attorney to determine your ability to bring a case.
True to our commitment to make sure that people are choosing the right options under their auto policies and not limiting their rights, our office will review any automobile policy free of charge and advise you what options to choose under your policy or at least inform you so you can make educated and knowing choices. Make sure you and your family are protected from financial disaster in the event of a serious accident.
The Exact Language of the Verbal Threshold Statute
The verbal threshold statute covering the issues above expressly provides as follows:
One of the following two tort options shall be elected, in accordance with section 14.1 of P.L.1983, c. 362 (C.39:6A-8.1), by any named insured required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4):
- Limitation on lawsuit option. Every owner, registrant, operator or occupant of an automobile to which section 4 of P.L.1972, c. 70 (C.39:6A-4), personal injury protection coverage, section 4 of P.L.1998, c. 21 (C.39:6A-3.1), medical expense benefits coverage, or section 45 of P.L.2003, c.89 (C.39:6A-3.3)regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4),medical expense benefits pursuant to section 4 of P.L.1998, c. 21 (C.39:6A-3.1) or benefits pursuant to section 45 of P.L.2003, c.89 (C.39:6A-3.3), or is a person who has a right to receive benefits under section 4 of P.L.1972, c. 70 (C.39:6A-4), section 4 of P.L.1998, c. 21 (C.39:6A-3.1) or section 45 of P.L.2003, c.89 (C.39:6A-3.3), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State, unless that person has sustained a bodily injury which results in death; dismemberment; significant disfigurement or significant scarring; displaced fractures; loss of a fetus; or a 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. For the purposes of this subsection, “physician” means a physician as defined in section 5 of P. L.1939, c. 115 (C.45:9-5.1).
In order to satisfy the tort option provisions of this subsection, the plaintiff shall, within 60 days following the date of the answer to the complaint by the defendant, provide the defendant with a certification from the licensed treating physician or a board-certified licensed physician to whom the plaintiff was referred by the treating physician. The certification shall state, under penalty of perjury, that the plaintiff has sustained an injury described above. The certification shall be based on and refer to objective clinical evidence, which may include medical testing, except that any such testing shall be performed in accordance with medical protocols pursuant to subsection a. of section 4 of P.L.1972, c. 70 (C.39:6A-4) and the use of valid diagnostic tests administered in accordance with section 12 of P.L.1998, c. 21 (C.39:6A-4.7). Such testing may not be experimental in nature or dependent entirely upon subjective patient response. The court may grant no more than one additional period not to exceed 60 days to file the certification pursuant to this subsection upon a finding of good cause. A person is guilty of a crime of the fourth degree if that person purposefully or knowingly makes, or causes to be made, a false, fictitious, fraudulent, or misleading statement of material fact in, or omits a material fact from, or causes a material fact to be omitted from, any certification filed pursuant to this subsection. Notwithstanding the provisions of subsection e. of N.J.S.2C:44-1, the court shall deal with a person who has been convicted of a violation of this subsection by imposing a sentence of imprisonment unless, having regard to the character and condition of the person, the court is of the opinion that imprisonment would be a serious injustice which overrides the need to deter such conduct by others. If the court imposes a noncustodial or probationary sentence, such sentence shall not become final for 10 days in order to permit the appeal of such sentence by the prosecution. Nothing in this subsection a. shall preclude an indictment and conviction for any other offense defined by the laws of this State. In addition, any professional license held by the person shall be forfeited according to the procedures established by section 4 of P.L.1997, c. 353 (C.2C:51-5); or
- No limitation on lawsuit option. As an alternative to the basic tort option specified in subsection a. of this section, every owner, registrant, operator, or occupant of an automobile to which section 4 of P.L.1972, c. 70 (C.39:6A-4), personal injury protection coverage, section 4 of P.L.1998, c. 21 (C.39:6A-3.1), medical expense benefits coverage, or section 45 of P.L.2003, c.89 (C.39:6A-3.3),regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, shall be liable for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by P.L.1972, c. 70 (C.39:6A-1 et seq.) or is a person who has a right to receive benefits under section 4 of that act (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State.
The tort option provisions of subsection b. of this section shall also apply to the right to recover for noneconomic loss of any person eligible for benefits pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4), section 4 of P.L.1998, c. 21 (C.39:6A-3.1) or section 45 of P.L.2003, c.89 (C.39:6A-3.3) but who is not required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c. 70 (C.39:6A-4), medical expense benefits coverage pursuant to section 4 of P.L.1998, c. 21 (C.39:6A-3.1) or benefits pursuant to section 45 of P.L.2003, c.89 (C.39:6A-3.3) and is not an immediate family member, as defined in section 14.1 of P.L.1983, c. 362 (C.39:6A-8.1), under a standard automobile insurance policy or basic automobile insurance policy.
The tort option provisions of subsection a. of this section shall also apply to any person subject to section 14 of P.L.1985, c. 520 (C.39:6A-4.5) and to every named insured and any other person to whom the benefits of the special automobile insurance policy provided in section 45 of P.L.2003, c.89 (C.39:6A-3.3) or the medical expense benefits of the basic automobile insurance policy pursuant to section 4 of P. L.1998, c. 21 (C.39:6A-3.1) apply whether or not the person has elected the optional $10,000 liability coverage insuring against loss resulting from liability imposed by law for bodily injury or death provided for in subsection c. of section 4 of P.L.1998, c. 21 (C.39:6A-3.1).
The tort option provisions of subsections a. and b. of this section as provided in this 1998 amendatory and supplementary act shall apply to automobile insurance policies issued or renewed on or after the effective date of P.L.1998, c. 21 (C.39:6A-1.1 et al.) and as otherwise provided by law.
N.J.S.A. 39:6A-8
What Happens at Trial in a Verbal Threshold Case
In a trial involving a case where a person has chosen the verbal threshold the court has to instruct the jury as to the higher burden plaintiff has to overcome. The Model Jury Charge that courts in New Jersey are mandated to use in Verbal Threshold cases is as follows.
5.33B LIMITATION ON LAWSUIT OPTION
- Introduction
In order to recover damages in this case, plaintiff must prove by a preponderance of the evidence that he/she sustained injuries which fit into one or more of the following categories:
- Death;
- Dismemberment;
- Significant disfigurement or significant scarring;
- Displaced fracture;
- Loss of a fetus;
- A permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.
If you find the injuries caused by the accident do not come within one of these categories, your verdict must be for the defendant. If you find the injuries caused by the accident do come within one of these categories, your verdict must be for the plaintiff.
Depending on the type of case and injury the jury may also be instructed as follows:
- Significant Disfigurement or Significant Scarring (Type 3)
(Revised 06/2007)
In this case, the plaintiff alleges and has the burden to prove that he/she suffered a significant disfigurement or significant scarring as a result of the motor vehicle accident. An injury shall be considered a significant disfigurement or significant scarring if a reasonable person would find that the disfigurement or scarring renders plaintiff’s appearance unattractive, objectionable, or as the subject of pity or scorn, or that such condition individually or collectively substantially detracts from plaintiff’s appearance or impairs or injures the beauty, symmetry, or appearance of the plaintiff so as to render the bearer unsightly, misshapen or imperfect deforming him/her in some manner. You shall consider as factors in making this determination the appearance, coloration, existence, size and shape of plaintiff’s disfigurement or scar[s] along with the characteristics of surrounding skin and the remnants of the healing process and other cosmetically important matters.
- Permanent Injury (Type 6)(Revised 03/2017)
In this case, the plaintiff alleges that he/she suffered a permanent injury as a result of the motor vehicle accident. 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.
Plaintiff must prove this claim through objective, credible medical evidence. Objective proof means the injury must be verified by physical examination or medical testing and cannot be based solely upon the plaintiff’s subjective complaints. Credible evidence is evidence you find to be believable.
If you determine that any one of the injuries contended by [Plaintiff] constitutes a permanent injury, then in that event, you should award damages to [Plaintiff], in accordance with these instructions for all his/her injuries that you determine to have been approximatelycaused by the negligence of the defendant, including those injuries that you find to be non-permanent.
Expanded FAQ: New Jersey Verbal Threshold & Lawsuits
Q: What is the difference between the verbal threshold and the no threshold in New Jersey auto insurance?
A: The verbal threshold limits your right to sue for pain and suffering unless your injuries meet specific criteria. The no threshold allows you to sue for any injury, regardless of severity.
Q: Can I sue for pain and suffering if I chose the verbal threshold?
A: You can only sue for pain and suffering if your injuries fall into one of the following categories: death, dismemberment, loss of a fetus, significant disfigurement or scarring, displaced fractures, or permanent injury.
Q: What counts as a permanent injury under the verbal threshold?
A: A permanent injury is one that has not healed to normal function and will not heal to normal function with further medical treatment. Objective medical evidence is required to prove permanency.
Q: Does the verbal threshold apply to economic damages like lost wages?
A: No, the verbal threshold only restricts claims for non-economic damages (pain and suffering). You can still claim economic losses such as lost wages and medical expenses.
Q: Who is subject to the verbal threshold?
A: Drivers who select the verbal threshold, their household family members, out-of-state residents injured in NJ (if their insurer does business in NJ), and certain pedestrians and passengers may be subject to the verbal threshold.
Q: Are there exceptions to the verbal threshold?
A: Yes. Named insureds who select the no threshold option, their spouses and children, and certain passengers or non-immediate family members not required to maintain PIP coverage are not subject to the verbal threshold.
Q: Can I change my tort threshold selection after an accident?
A: No, you cannot change your selection retroactively. You can only update your tort threshold option when renewing your auto insurance policy.
Q: How do I know which threshold I selected?
A: Review your auto insurance policy documents or contact your insurance agent. Many consumers are unaware of their selection until after an accident.
Q: What should I do if I’m injured in a car accident and have the verbal threshold?
A: Consult an attorney to determine if your injuries meet the criteria for a lawsuit. An attorney can help you gather the necessary medical evidence and guide you through the claims process.
Q: Does the verbal threshold affect claims against commercial vehicles or public transportation?
A: Generally, injuries caused by commercial vehicles or public transportation may not be subject to the verbal threshold, but exceptions exist. Consult your attorney for specific guidance.
Q: What is the process for proving a qualifying injury under the verbal threshold?
A: You must provide a certification from a licensed treating physician or board-certified specialist, based on objective clinical evidence, within 60 days of the defendant’s answer to your complaint.
At our firm, the first thing we do is analyze whether there is a way we can argue the verbal threshold does not apply to your accident based on the current law explained above. Where our attorneys are unable to argue that you are not subject to the verbal threshold, we start to gather evidence to build the proof in your case to help you overcome the verbal or lawsuit threshold so that you can recover money. The key is establishing under one of the categories that you are entitled to recover; this requires building the case early on and making sure the client receives appropriate treatment and proper diagnostic testing such as MRIs, CT Scans, X-rays, EMG testing, and appropriate clinical testing to show objective evidence of injury. If you have the verbal threshold and think you cannot recover, please give one of our attorneys a call to discuss whether we can help you overcome this block to your fair recovery.
Real Case Example
We recently had a case with a married mother of two. She sustained a serious herniated disc but had no invasive treatment as she did not want surgery or any epidurals. Despite this serious injury and her severe limitations, the insurance company would not pay a penny contending that her injuries did not show the permanence required to get over the verbal threshold. We had to go to trial and our client made a fantastic witness explaining to the jury how badly her back injury and herniated disc affected her. On the last day of trial over seven days before summations, we achieved a six-figure recovery. In the verbal threshold cases, the insurance companies will dig in their heals and try to not pay. If you have objective evidence of injury, our firm is glad to bring your case to court and maximize your recovery.
