After a crash, many people ask the same questions: Who pays for my medical treatment? Do I have to file a lawsuit? How do I start a car accident insurance claim? In New Jersey, the answer often begins with the no-fault car accident system. Although this approach is meant to streamline claims, it can be difficult to understand—especially when you are injured.
This article explains how no-fault insurance works in New Jersey, what is and is not covered, and how these laws may affect your ability to recover compensation.
What Does “No-Fault” Mean in a Car Accident?
New Jersey follows a no-fault insurance system. After a collision, each driver typically turns to their own Personal Injury Protection (PIP) insurance for medical expenses and certain financial losses—regardless of who caused the accident.
Your PIP coverage may help pay for the following:
- Medical treatment,
- Injury rehabilitation expenses,
- A limited amount of lost income, and
- Essential household services if you are unable to perform them due to injury.
This framework limits the need for lawsuits by requiring each party to use their own policy. However, fault still matters in some cases, and not all damages fall under PIP.
What Does No-Fault Car Insurance Not Cover?
There are important exclusions under a basic no-fault policy. To pursue compensation for certain losses, you may need to meet additional legal requirements.
PIP typically does not include coverage for:
- Property damage,
- Noneconomic damages like pain and suffering,
- Punitive damages, or
- Injuries to other vehicle occupants not covered by your policy.
To recover these damages, you must either meet a specific legal standard called the “verbal threshold” or have an insurance policy without certain limitations.
What Is the Verbal Threshold in New Jersey?
When purchasing car insurance in New Jersey, policyholders must choose whether to select the “limitation on lawsuit” option for their coverage or the “no threshold” option. The limitation on lawsuit option, also known as the verbal threshold, restricts your ability to sue for noneconomic losses from an accident unless your injuries fall into one of these categories:
- Loss of a body part,
- Significant disfigurement or scarring,
- Displaced fracture,
- Loss of a fetus,
- Permanent injury, or
- Death.
If you chose the “limitation on lawsuit” or “verbal threshold” option, your injury must be severe enough to qualify you to step outside the no-fault system and file a claim for noneconomic compensation, such as pain and suffering against the person at fault for the accident and your injuries. It is always recommended to take the no threshold or zero threshold, which means you can bring a claim for even a small injury against the person at fault for the accident.
How to File a No-Fault Car Accident Insurance Claim
Filing a no-fault car accident insurance claim requires timely documentation and communication. After notifying your insurer, you should provide the following:
- Accident details. Include the time, location, and facts of the crash, along with contact information for all involved parties and witnesses.
- Medical records. Submit treatment summaries, bills, prescriptions, and provider notes that support your injuries and expenses.
- Proof of lost income. Provide documentation from your employer or copies of pay stubs if the injury kept you from working.
- Ongoing care documentation. Include receipts or invoices for services like physical therapy or in-home assistance.
Once your insurer receives this information, they will review your no-fault car accident insurance claim and determine the extent of benefits under your PIP policy.
Can You Still Sue the Other Driver in a No-Fault Car Accident?
Yes, in specific situations. If your injuries meet the verbal threshold or you selected the “no limitation on lawsuit” option when buying car accident insurance, you may pursue additional compensation.
You may also file a separate claim outside the no-fault system if:
- The other driver was uninsured or underinsured;
- The other party acted intentionally or recklessly; or
- You were a pedestrian, bicyclist, or motorcyclist not covered under PIP.
In such cases, it may be possible to recover damages beyond what PIP provides, such as compensation for emotional distress and long-term pain and suffering.
Navigating New Jersey’s no-fault car accident system can be complex. Petro Cohen, P.C. focuses on helping injury victims understand their rights and options under the law. Our firm can assist with evaluating policies, filing PIP claims, and identifying when you may be eligible to step outside the no-fault rules. With decades of experience and a reputation for results, we provide the guidance and advocacy clients need during difficult times.
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