NJ Auto Insurance: What is a Tort Threshold?

MOUNTAINSIDE, N.J., June 16, 2015 /PRNewswire/ -- When people apply for auto insurance, there are a lot of choices in coverage they need to make. According to Francis M. Smith, NJ personal injury attorney, one of the most critical choices is the "threshold," AKA the "tort threshold" or "lawsuit threshold." This one choice saves a good bit of money (Limitation on Lawsuit Threshold), whereas the alternative choice (No Threshold) does not. The savings can be significant.

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Mr. Smith warns, "So it's a no-brainer, right? Not so fast. Be an intelligent insurance buyer!"

Here's the difference: No Threshold means a car accident victim can make a claim to sue if the other driver's insurance carrier does not settle the claim - no matter how slight or how serious the injuries are. However, when people elect to save premium dollars and opt for the Limitation on Lawsuit, their options are very limited. If someone hurt in an auto accident has the "Limitation on Lawsuit" in their auto insurance policy, before recovering anything for pain and suffering, loss of enjoyment of life, limitations on lifestyle,  and the like (what the law calls non-economic damages) the victim would need to prove one of six injuries listed in the statute:

1. Death – (the legislature thinks this is a serious enough injury!)
2. Loss of Fetus
3. Loss of a limb
4. Serious scarring or disfigurement
5. Displaced fractures
6. Permanent injury proven in a very specific way: with a Certification of Permanent Injury from a treating doctor – who will say, under penalty of perjury, that the car accident victim has suffered permanent injury to a body part or organ which will not recover to normal even with further treatment – and this has to be based on OBJECTIVE evidence – like an MRI or EMG or CT scan or x-ray- a test that does not rely on the response of the injured person.

This means that many injuries – like serious whiplash injuries and simple fractures - suffered by innocent victims of another driver's negligence will remain uncompensated – that is what is given up when people choose to save money by taking the Limitation on Lawsuit Threshold.

Even pretty serious injuries (to those who suffer them, not the insurance companies) like bulging or herniated discs – including those requiring epidural injections to control pain and inflammation – have been the subject of decisions dismissing a claim, or jury verdicts saying the victim gets absolutely nothing despite injuries – because the jury does not believe that the injuries are permanent.

Remember, having the certification from the treating doctor only gets the injured plaintiff in the courtroom. Mr. Smith warns, "The insurance companies have their 'hired gun experts' (my opinion) who will say, whatever the evidence, that either your injury has disappeared, or that you have an injury which is not permanent, or that while you may have a permanent problem, it is not a result of this accident, but the normal aging process and degenerative conditions." He adds, "Don't think this does not happen – I see it every day. And these bought-and-paid-for witnesses (again, my opinion) make in some instances hundreds of thousands of dollars a year examining people injured in accidents and rendering 'opinions' in court several times a week for the insurance carriers. Unfortunately, many times they are believed by the juries – after all, they are professional witnesses and in some instances very polished in court."

Judges who preside over these trials report that the success rate for insurance companies may be more than 90% in these "Limitation on Lawsuit" cases – meaning that the injured person is awarded nothing at all.

Mr. Smith cautions, "I have been a personal injury litigation attorney for over thirty years and I have represented thousands of clients who have been injured in auto accidents. These cases many times rise and fall on what threshold my client (or her spouse, or parent) has selected when they purchased insurance."

In Mr. Smith's experience, over 90% of all drivers have selected the "Limitation on Lawsuit Threshold" and only 10 to 15% of drivers opt for the more expensive "No Threshold."   Mr. Smith attributes the lack of adequate automobile insurance to the lack of accountability - insurance companies and their agents are specifically exempted (by statute) from liability for failure to properly explain what this important decision really means.

When presented with the pitch to save money by selecting the "Limitation on Lawsuit Threshold" option, it can be tempting to choose that option while being uninformed of the cost. Mr. Smith notes "I totally understand that in these challenging economic times, we are all looking for ways to save money." He recommends to clients, "At very least, find out how much the cost difference is – now that they know what they're sacrificing for the lower price." If they can possibly afford it, he recommends they pay the extra money and protect themselves and their loved ones from the negligence of others on the road. He adds, "It only benefits the insurance companies in the long run if you do not."

Mr. Smith personally selects "NO THRESHOLD" for his family. "If someone's negligence hurts someone in my family, I want them to get the compensation they deserve for pain and suffering, without having to worry about proving that they will be injured forever – in the opinion of the six strangers on the jury, being told half-truths and outright lies by the insurance company's hired gun 'expert'," he concludes.

Francis M. Smith, Esq.
908 233-5800
Cell: 908 337-5888
Email

SOURCE Francis M. Smith, Esq. NJ Personal Injury Attorney