How Your Choice of Automobile Insurance Policy Affects Your Right to Sue for Damages
In many states, people injured in auto accidents can immediately seek compensation from the driver who caused the crash. Here in New Jersey, though, we have what is called a no-fault system, which means your own insurance is the first, and potentially only, source of compensation, even if the accident was another driver’s fault. Further, we are a “choice” no-fault state, which means that your potential right to sue the other driver depends on which type of insurance coverage you carry.
The first choice New Jersey drivers make is the choice between Basic coverage or Standard coverage. Drivers who choose Basic coverage have essentially no ability to sue the other driver after an accident. This means Basic policyholders who get into an accident can get compensation only through their own insurance. Basic policies typically provide the following coverage:
- Personal injury protection (PIP) — Covers injuries sustained by you and your passengers up to $15,000 per person, or up to $250,000 per person for permanent brain or spinal cord injuries or other catastrophic injuries.
- Property damage liability — Provides up to $5,000 to cover property damage that you cause to someone else’s vehicle.
- Bodily injury liability — This is not automatically included in Basic policies; drivers can purchase it as an option. If you don’t purchase it, you won’t be covered against claims and lawsuits filed against you by anyone hurt in an accident you caused.
- Other coverages — Basic policies do not provide uninsured/underinsured motorist coverage, leaving you with no way to get compensation if you are hit by someone who has no insurance or not enough insurance. Some Basic policies do offer comprehensive and collision coverages, but they cost extra.
This coverage is often inadequate, which is why it may be wise to choose a different policy.
Unlike Basic policyholders, drivers who choose a Standard policy may have the right to sue the at-fault driver. If you select a Standard policy, you must then choose between the “limited right to sue” policy or the “unlimited right to sue” policy.
Selecting the limited right to sue policy means you have the right to sue the other driver for economic damages, such as medical bills and lost wages. However, you or a loved one cannot sue the at-fault driver for pain and suffering and other noneconomic damages unless you sustain one of these six types of physical trauma:
- Loss of a body part
- Significant disfigurement or scarring
- Displaced fractures
- Loss of a fetus
- Permanent injury, meaning a body part or organ was damaged and will never return to normal function, even with ongoing treatment
- Death
If you choose the unlimited right to sue Standard policy, also known as a zero-threshold policy, then you have the right to sue the other driver for both economic damages and pain and suffering, regardless of the severity of your injuries. While the unlimited right to sue option is the most expensive, I recommend it because it provides the most protection.
Kevin T. Kutyla, Esq. in Succasunna helps people get maximum compensation for accidents sustained in car, truck and motorcycle accidents in New Jersey. If you have been injured or have insurance questions, please call 862-354-8931 or contact me online to schedule a consultation.