What is limited tort insurance in New Jersey?
In New Jersey, car owners have a choice of electing limited tort or full tort car insurance. Limited tort insurance limits your ability to sue for pain and suffering damages. In New Jersey, limited tort is usually described as being a “limitation on lawsuit” option on your car insurance policy. Electing the “limitation on lawsuit” option (sometimes call the “verbal threshold”) may provide you with a lower insurance premium, but in exchange you are giving up your right to recover for pain and suffering caused by a car accident.
Our firm counsels our clients to choose full tort or the “no limitation on lawsuit” option on their car insurance. Electing full tort preserves a driver and his or her family’s ability to sue for pain and suffering regardless of the type of severity of injury.
Exceptions To Limited Tort
Even if you have elected the “limitation on lawsuit” option, you can still recover economic damages such as lost wages, outstanding or unpaid medical bills, or property damage. However, to recover for pain and suffering you must show that your injuries fall under one of the exceptions set forth in N.J.S.A. 39:6A-8, which sets forth the following exceptions:
- 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.
Many of these exceptions are very straightforward. However, the permanent injury exception is one that may require specific documentation and proof in order to apply. This includes a certification from a treating physician that certifies that the person has suffered a permanent injury that will not heal to function normally and will not heal to function normally with further medical treatment.
Many people ask for an example of how electing limited tort would negatively affect their ability to fairly recover money in a lawsuit. Here is an example. A person is hurt in a rear-end car crash and suffers a broken arm. The person has trouble caring for his or her child, cleaning around the house, driving, doing chores, and performing work. After three months, the person’s arm is healed. If that person has elected limited tort and did not suffer a “displaced fracture” then this person would likely be barred from recovering any money for pain and suffering in a lawsuit. That is regardless of whether the other person is completely at fault and how difficult those three months of healing were. If the fracture is not displaced and the injury is not permanent, then the law may completely bar the person from receiving money for pain and suffering.