Choosing the right automobile insurance policy in the State of New Jersey under New Jersey’s current law can make the difference between being compensated for injuries sustained in a motor vehicle accident and not being compensated for such injuries. There are two important aspects with regard to choices that one makes when they sign up for automobile insurance within the State of New Jersey. They deal with the lawsuit limitation option and uninsured/underinsured motorist coverage.
Each person who owns an automobile that is principally garaged within the State of New Jersey must obtain certain minimum insurance coverage for that vehicle. Under most policies, the person who applies for the insurance will have to make a choice between the “limitation on lawsuit” option and “no limitation on lawsuit” option. Although the policy premiums for policies that contain a “limitation on lawsuit” option are often times less expensive than the alternative, you should be aware that your monetary recovery in most motor vehicle accidents may be significantly limited if you select this option. For instance, if you chose the “limitation on lawsuit” option, you, anyone who is a named insured under your policy and any relatives living in your household at the time of such an accident would only be entitled to monetary compensation for injuries sustained in a motor vehicle accident if their injuries satisfy one of the following categories:
3. Significant disfigurement or significant scarring;
4. Displaced fractures;
5. Loss of a fetus;
6. Permanent injury within a reasonable degree of medical probability.
If you choose the “no limitation on lawsuit” option, you, anyone who is a named insured under your policy and any relatives living in your household may be entitled to monetary compensation even if their injuries do not fall within one of the above mentioned categories.
Unfortunately, many clients come to our firm for an initial consultation when they have sustained injuries in a motor vehicle accident and are not aware of the option they have chosen under their policy. The fact that they are unable to be compensated for injuries they have sustained in a motor vehicle accident often times comes as a surprise to them at the time of the consultation. Accordingly, it is suggested that you check your motor vehicle insurance policy to determine which option you selected when you initially signed up for your motor vehicle insurance and, if you previously chose the “limitation on lawsuit” option, we suggest that you contact your insurance agent, broker or insurance company and amend your policy to include the “no limitation on lawsuit” option.
Another unknown pitfall when it comes to motor vehicle insurance coverage relates to uninsured/underinsured motorist coverage. Uninsured/underinsured motor vehicle coverage is coverage that you purchase to protect yourself from injuries sustained by you when you are injured in a motor vehicle accident with a person that does not have any insurance coverage, an unidentified person due to a hit and run type accident, or a person who does not have sufficient automobile insurance coverage to fully compensate you for your injuries. In the State of New Jersey, you cannot have uninsured/underinsured motorist limits higher than the limits that you select for your liability coverage. Accordingly, many individuals will purchase sufficient liability coverage under an “umbrella” policy without regard to their liability limits as contained within their motor vehicle insurance policy. Unfortunately, in limiting their liability coverage under their motor vehicle insurance policy, they are also limiting their ability to be fully compensated for any injuries suffered at the hands of an underinsured or uninsured motorist.
Once again, for a slightly increased cost, one is able to increase their liability and uninsured/underinsured motorist coverage in order to more fully protect themselves in the event they are injured as a result of a motor vehicle accident with a uninsured/underinsured driver.
If you have any questions concerning the lawsuit on limitation option or uninsured/underinsured motorist coverage as it relates to your particular situation, we would be happy to discuss this matter with you. Hopefully, the advice set forth above will prevent any surprises in the event you or a family member are injured in a motor vehicle accident. Contact us at 732-440-3950 for immediate assistance.