What Does “Limitation on Lawsuit” Mean?
Effective on January 1, 1989, every New Jersey car liability insurance policy required the named insured to elect either the “Verbal Threshold” (lawsuit threshold) option or the “No Threshold” (zero threshold) option. Today, the threshold option is known as the“Limitation on Lawsuit”.
If you choose this option, you will seriously affect your legal rights and remedies should you or one of your family members living with you become injured in a car accident!
If you are in an accident, and you have elected the “Limitation on Lawsuit”, you actually have given up, that’s right given up your right to recover money for your pain and suffering unless you sustain one of the following types of injuries:
- Type 1. Death
- Type 2. Dismemberment
- Type 3. Significant disfigurement or significant scaring
- Type 4. Displaced fractures
- Type 5. Loss of fetus
- Type 6. A permanent injury within a reasonable degree of medical probability other than scaring or disfigurement.
Many times insurance agents and/or brokers will try to “sell” you the “Limitation on Lawsuit” option by stating that not only is it cheaper but that it won’t affect your legal rights.
This is not true!
The “Limitation on Lawsuit” option absolutely limits your rights! If you pick it you actually are giving up your right to make a claim (or sue) against someone who causes you injuries in a motor vehicle accident!
For your own protection, never, ever, ever elect the “Limitation on Lawsuit” option!
If you’re not sure if you have selected this option, then believe it or not you probably have it! You can check this by looking at your current car insurance policy.
The first page or two of your policy outlines your coverages. This page or pages is called the “Declaration Page(s)”. Look for the words “Limitation on Lawsuit option applies”. If you see those words or something similar, you have the option! If you do, contact your insurance agent or immediately and change your coverage!
Why? Because if you are in an accident and you’re injured and your injuries do not fall within one of the six (6) types on the last page, you may be without a remedy!
Also know that even if your injury may be within one of these categories, proving it may be very difficult.
And if you have the “Limitation on Lawsuit” option on your policy, the option will apply to all of your family members living with you. Please, for the protection of you and your family members, get rid of the “Limitation on Lawsuit” option.
What Is Uninsured Motorist (UM) Insurance Coverage?
t is estimated that 15% of the drivers in New Jersey are uninsured. So what happens if you are injured in an accident with a driver that has no car insurance? Can you recover anything for your injuries?
Well, you certainly can if you either have a car insurance policy or live with a family member (spouse/child) that has a car insurance policy. That’s because your policy has what’s known as “Un-insured Motorist Coverage” (also known as “UM” Coverage). This provision in your own car insurance policy actually covers you if you get injured in an accident caused by an uninsured driver.
And the best part about the UM part of your policy – you pick the amount of the coverage! That’s right! When you buy a car insurance policy you’re offered a choice as to the amount of uninsured coverage you want!
To fully protect yourself and your family from the people driving around with no insurance, get at least $250,000 limits of uninsured coverage! Call your insurance company and increase UM your policy limits now! I recently raised my uninsured limits from $100,000 to $250,000 and my premium only went up an additional $58 a year! Only $58 a year for another $150,000 worth of insurance. What a “no-brainer”!
What Is Under-Insured Motorist (UIM) Insurance Coverage?
Now let’s talk about all the drivers that have insurance but they have policies with low liability limits. It is estimated that about 25% of New Jersey drivers have the minimum policy limits as required by law, that is $15,000/$30,000 insurance coverage.
If you are involved in an accident with a car that has a minimum policy, the most you can get for your injuries is $15,000! And this is even if you were seriously injured! This is what is known as an “under – insured” car.
But what if your injuries (pain and suffering) are worth far more than the amount of insurance on the other person’s car? Well, you may be able to get more money for your pain and suffering from the Under-Insured Motorist Coverage (UIM) part of your own car insurance policy.
If your UIM limits are higher than the limits of the car that causes you injuries, then you can get additional damages (money) from your own policy if it is determined that your injuries are worth more than the limits of the car that hit you!
For example, let’s suppose you chose UIM limits of $250,000 on your car insurance policy. Let’s also suppose you get injured in an accident with a car that has only $15,000 in liability coverage. What if your injuries are worth $250,000? Well, you can get $15,000 from the person causing the accident and an additional $235,000 from your own car insurance company! ($15,000 + $235,000 = $250,000)
To protect yourself and your family against the “high” percentage of under-insured cars on the road, your car insurance policy should have uninsured and underinsured (UM/UIM) limits of at least $250,000/$500,000. Then, if you are involved in an accident with a vehicle that is either underinsured or uninsured, your policy may cover your damages up to the amount of your UM/UIM limits.
I am confident that this information will assist you in achieving maximum compensation for your pain and suffering. Please use it wisely. If you have any question, please call or email me at no charge. I’d be happy to answer any of your questions.