Evans Agrapidis Explains The Lawsuit Threshold Option
Detangling a Complicated Insurance Concept that Affects Victims of Traffic Accidents in New Jersey
In 1988, New Jersey adopted its first version of the Verbal Threshold law ( also known as the Lawsuit Threshold ) which made it more difficult for Garden State residents involved in automobile collisions to sue any individuals or entities that might bear some responsibility for their resulting injuries.
In practice, what this means is that a person’s right to file lawsuits is almost wholly dependent on a single selection made at the outset of purchasing a vehicle insurance policy. It happens like this: upon setting up the parameters of a policy, a person is presented with a choice between the ‘no limitation on lawsuit option’ and the ‘lawsuit threshold option’ (which might also be listed as the ‘verbal threshold option’ or the ‘tort threshold option’). By choosing the former, a person will fully retain the ability to sue anyone they might think is to blame for future injuries derived from a traffic accident, but will pay higher premiums in exchange for that privilege. By choosing the latter, a person largely waves their right to sue but will pay lower insurance premiums each month.
“It should be noted that there are some severe injuries which are exceptions to the waiver” states personal injury attorney Evans Agrapidis. So, even if a person elects to choose the lawsuit threshold option on their policy, they can still file suit against any individual or entity in the event of a permanent injury, major disfigurement or scarring, a displaced or major fracture, loss of a fetus, loss of a body part, or death.
Unfortunately, many insurance agents gloss over, mischaracterize, or simply omit these important facts about the lawsuit threshold option when explaining policy details to clients. Without proper education on the subject, many people — especially people of humbler means — reflexively choose the cheaper policy option, not realizing that by doing so they are giving up significant legal rights and recourses. In turn, the first time many accident victims learn about the lawsuit threshold option is by learning that they in fact signed up for it, oftentimes just after they’ve been injured in a car collision and are visiting a lawyer for a case consultation.
Experienced lawyers often are successful in proving “permanent injury” and overcoming the lawsuit threshold restrictions. However, if these cases do make it to court, the onus of proof falls to the accident victim, who must produce expert medical witnesses verifying that their injuries are indeed legitimate and permanent. Insurance companies then counter with their own expert medical witnesses who diagnose the injury as temporary, and the whole mess is left for a jury to decide. Further complicating matters, lately, most major insurance firms based in New Jersey have adopted a stance of contesting all lawsuits filed by anyone holding a lawsuit threshold option policy, regardless of whether their injury is on the exemption list or not.
“If all of this sounds antithetical to the ideal of consumer protectionism, that’s because it is” states Agrapidis. The lawsuit threshold option was passed into law after a heavy lobbying campaign waged by a consortium of large insurance companies and, although ostensibly meant as a response to skyrocketing premiums, has mainly served to shield them from financial liability.
Perhaps one day the New Jersey State Assembly will repeal the portions of the No Fault Act that enable this unfortunate practice to continue, but until then, the bottom line is this: by selecting the lawsuit threshold option on an auto insurance policy, a person exposes themselves to monumental financial risk should they ever become injured in a motor vehicle collision.
