The ‘Verbal Threshold’ Option Can Leave Auto Owners and Their Families High and Dry

The selection you make on your auto insurance policy will affect your legal rights to receive fair compensation from the careless driver who caused the accident. Because this is such an important decision, an in-depth understanding of all the legal ramifications is essential. There can be an enormous impact on the ability of an injured plaintiff to seek just compensation.

Under New Jersey law, automobile owners must elect between a limitation on their rights under options known either as the “limitation on lawsuit,” “verbal threshold” or “lawsuit threshold” automobile policy or they may maintain full rights under an option known as “no limitation on lawsuit,” “no threshold” or “zero threshold” policy. Consumers are often induced into selecting what is referred to as a money-saving option in exchange for certain limitations on their rights without understanding the full impact this option imposes. This option can leave auto owners and/or members of their family high and dry in the event of an accident involving personal injuries.

If the “limitation on lawsuit,” “verbal” or “lawsuit” option is selected the owner of the vehicle as well as all family members within the household are significantly restricted from seeking compensation for the injuries that are referred to as “noneconomic damages.” When rights to compensation are governed by this limitation, no lawsuit can be successfully maintained for injuries unless the accident causes: (1) death, (2) dismemberment, (3) significant disfigurement or scarring, (4) a displaced fracture, (5) loss of a fetus, or (6) permanent injury. Without proof of an injury that meets one of these criteria, the threshold or limitation is not overcome and the person injured in the accident is not entitled to any compensation.

Since a permanent injury is defined as an injury where a body part has not and will not heal to function normally, an innocent victim seeking fair compensation for injuries faces the burden of protracted litigation. The law also requires objective evidence demonstrating permanent injuries and some injuries simply cannot be documented with conventional medical exams or tests. In making the correct diagnosis, physicians often rely on subjective responses during physical or mental examination. If the injury is one where no test or exam can objectively demonstrate an abnormality, the victim will go uncompensated. Where X-rays, MRIs or other tests must be interpreted by physicians, the defense will routinely hire doctors who are professional witnesses to give contravening interpretations of the films or tests in an effort to confuse the jury and prevent the injured plaintiff from sustaining his or her burden of proof.

Thus, insurance companies typically refuse to settle claims where the victims must prove their injury meets the threshold. Consumers who underestimate the complexity of this issue may assume that even with limitations on their right to sue their family will be entitled to compensation for any significant injury may be in for an unpleasant surprise.