Understanding New Jersey No-Fault Laws

If you get involved in an automobile accident in New Jersey, you will need to navigate the state’s no-fault laws. New Jersey is one of only 12 no-fault car insurance states. To make things more complicated, it uses a unique “choice” no-fault law. You may need assistance from a car accident attorney to understand New Jersey’s complex no-fault system and recover fair financial compensation after your car crash.

What Is the No-Fault Law?

A no-fault law means that after a car accident, both drivers (and all injured parties) file claims and seek compensation from their own car insurance providers, regardless of fault. It is not necessary to prove fault or establish negligence to qualify for no-fault insurance benefits. In a fault state, on the other hand, a crash victim can bring a claim against the at-fault driver but must prove the defendant’s fault as more likely to be true than not true.

What Are New Jersey’s Insurance Requirements?

In New Jersey, every vehicle owner must purchase and maintain the minimum required amounts of automobile insurance before registering the vehicle and driving on public roads. Currently, New Jersey law requires three different types of no-fault car insurance:

  • Personal injury protection (PIP) insurance: pays for your medical expenses, as well as medical care for your passengers and members of your household, after a car accident, whether or not you were at fault for the collision.
  • Liability insurance: pays for the damages suffered by others in an auto accident that you cause. The only liability insurance that is required in New Jersey is property damage liability coverage ($5,000). However, bodily injury liability insurance is also available for an additional cost.
  • Uninsured motorist insurance: protects you financially if you are involved in an accident with a driver who is unlawfully driving without the proper insurance coverage in New Jersey.

Every driver in New Jersey must carry the minimum amounts of car insurance that are lawfully required, but it is always an option to increase the amount of coverage. The minimum amount of PIP coverage is $15,000 on a standard plan. However, most New Jersey drivers choose to purchase $250,000 in PIP insurance to cover serious or catastrophic injuries.

Limited Right to Sue vs. Unlimited Right to Sue Insurance

A “Basic” policy in New Jersey comes with only the required types of car insurance, listed above. Vehicle owners in the state also have the option of choosing a “Standard” policy, which includes bodily injury liability insurance. This will pay for the medical bills of others after an at-fault accident or if the policyholder is sued. With a Standard car insurance policy, a driver in New Jersey can choose between “limited” right to sue and “unlimited” right to sue coverage.

Limited right to sue costs less for the vehicle owner. With this type of insurance, an injured accident victim can pursue legal action against the driver at fault for the accident outside of New Jersey’s no-fault law and PIP coverage. However, this option is only available if the victim suffers a significant injury, such as permanent scarring or disfigurement, a displaced bone fracture, the loss of a body part, permanent injury, or the loss of a fetus. The death of an individual will also entitle a policyholder to sue the at-fault party.

With unlimited right to sue insurance, there is no injury threshold. After a car accident that causes any level of injury or damage, a victim with this type of insurance can file a claim against the at-fault party. A victim can also recover pain and suffering damages, which are not always available with the limited right to sue option. The tradeoff is that this insurance costs more money and the victim must prove that the third party is at fault for causing the car accident to qualify for coverage.

For more information about New Jersey’s complicated no-fault insurance system, contact a personal injury attorney to request a free car accident case consultation. Our personal injury lawyers serve Hackensack, Teaneck, Bergen County, Union City and the entire state of New Jersey.