You unfortunately get involved in a motor vehicle accident as a passenger or a driver. You initially seek treatment at a local hospital. You receive treatment and then are released. In the next few days, you start treatment with your doctor. At some point, you decide to seek advice from a lawyer. An appointment is made. The lawyer is advised how the accident happened and what injuries you sustained. The lawyer requests a copy of the insurance declaration page for your insurance policy, the car that you were driving or the car that you were a passenger in. (Depending on your own insurance policy; if you have one or required to have, will decide which policy you need to review). You may wonder why the lawyer needs to review this document if the other driver is at fault for the accident. The insurance declaration page is just as important as the police report at this point. The insurance declaration page contains quite a bit of information that needs to be reviewed by the lawyer. One piece of information that it contains concerns any limitation on your right to sue.
This may be the first time you have ever heard of this. The insurance company never told you about this. Your agent, if you have one, never told you about this. Why would they? Your choice affects how much you pay for insurance. The choice you make, whether consciously or unconsciously, can dramatically increase your cost for insurance. If the cost is too high, you could decide to select a new agent or insurance company. There is no incentive for your agent or insurance company to tell you about this. When you fill out the coverage selection form, you have to make a selection concerning any limitation on your right to sue. This form can be filled out over the phone or in person. You at some point are required to sign the form.
Now to the selections. There are two of them. The choices are simple. How they apply to you can be complicated. Whether they apply to you, can be complicated. There are exceptions. This is why you need a lawyer to help you navigate these uncharted waters.
The choices are the limited right to sue and the unlimited right to sue. The limited right to sue is also known as the verbal threshold or the limited threshold. These descriptions describe the same category. Most owners of insurance policies have the limited right to sue. The main reason is the cost. This selection is much cheaper than the unlimited right to sue. If you select the unlimited right to sue, your cost for the insurance is much greater. You, however, have no limitation on your ability to sue.
The description below is taken directly from the State of New Jersey website.
Important |
| The choice you make affects how much your insurance will cost and what claims will be paid in the event of an accident. The choice you make regarding your right to sue another driver applies to you, your spouse, children and other relatives living with you who are not covered under another automobile insurance policy.The Unlimited Right to Sue and Limited Right to Sue options only cover lawsuits for “pain and suffering” or non-economic losses. Your medical expenses and some economic losses for injuries in auto accidents will be paid up to the limits of your PIP coverage and are not affected by the choice you make here. |
Unlimited Right to Sue – Under the No Limitation on Lawsuit Option, you retain the right to sue the person who caused an auto accident for pain and suffering for any injury.
Limited Right to Sue – By choosing the Limitation on Lawsuit Option, you agree not to sue the person who caused an auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below: (Choosing this option does not affect your ability to sue for economic damages such as medical expenses and lost wages.)
- death
- loss of a fetus
- a displaced fracture
- significant disfigurement or significant scarring
- loss of body part
- permanent injury (Any injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment based on objective medical proof.)
You will note several items about the law. You not only have a limited right to sue, but you have agreed in advance to limit your right to sue. This will be news to you. Secondly, you will need a certain injury if you are to file a lawsuit. You also may not be able to determine if you have an injury that fits into one of the above six (6) categories till your treatment has been completed and medical reports have been issued by your treating doctors. The first five (5) categories are self explanatory and are easier to determine. Most of the litigation arises over category six (6). How you determine if you satisfy category six (6) and what are economic and non-economic losses will be the subject of another blog.
Sources:
http://www.state.nj.us/dobi/division_consumers/insurance/basicpolicy.shtml