Automobile Accidents and No-Fault Insurance

Many states, including both New York and New Jersey, have adopted the No Fault insurance law. In basic terms, the no fault insurance law provides that when you are involved in an automobile accident your own insurance company will pay your medical bills and lost wages regardless of who was at fault for causing the accident. This means that even if you drive your own car into a telephone pole through no fault of anyone else, your medical bills and lost wages will be paid. Your own insurance company will also pay your medical bills and lost wages if you are standing still at a red light and are struck from behind by another car. Each state provides different limits for the amount of coverage that is available to pay for medical bills and lost wages. Additionally, each state has its own rules about which insurance company pays for passengers in a vehicle and pedestrians struck by other vehicles.

What Is a Serious Injury Under New York Insurance Law?

While the no fault insurance law does provide benefits for medical bills and lost wages, it generally severely limits an injured person’s right to recover for pain and suffering. For example, under New York’s no fault law, an individual injured in an automobile accident can only make a claim against a negligent party for pain and suffering if that individual sustained a “serious injury”. Serious injury is specifically defined under New York’s insurance law as:

• death;
• dismemberment;
• significant disfigurement;
• fracture or broken bone;
• loss of a fetus;
• permanent loss of use of a body organ,
• member, function or system; or
• a permanent consequential limitation of use of a body organ or member; significant limitation of use of body function or system;

An individual injured in an automobile accident must be able to show that he or she has suffered an injury which falls into one of those 8 categories to recover for pain and suffering. New Jersey and Florida have different requirements for their no-fault thresholds.

There has been substantial litigation about what constitutes a “serious injury”. Certain neck and back injuries which are categorized as “soft tissue” may qualify under certain circumstances. Usually the determination as to whether or not a particular injury meets the serious injury threshold can only be made after reviewing the medical records of the treating doctors.

If you have been injured and have suffered more than minor bumps and bruises, you should call us (or e-mail us) for a free evaluation of your claim.

The 90/180 Day Rule

Serious Injury means a medically determined injury or impairment of a non-permanent nature. The injury prevents a person from performing substantially all the important acts of daily life. The injury or impairment must continue for at least 90 days during the 180 days that immediately follow the injury. The 90 days need not be consecutive; they need only add up to 90 days and occur over the 180-day period immediately following the accident. This aspect of New York Insurance Law is called the 90/180 rule.

There has been substantial litigation about what constitutes a “serious injury”. Certain neck and back injuries which are categorized as “soft tissue” may qualify under certain circumstances. Usually the determination as to whether or not a particular injury meets the serious injury threshold can only be made after reviewing the medical records of the treating doctors.

If you have been injured and have suffered more than minor bumps and bruises, you should call us (or e-mail us) for a free evaluation of your claim.

Please Review Your Auto Insurance Policies

Most of our clients are aware of the importance of purchasing adequate liability insurance for their automobiles and their homes. Unfortunately, very few people realize that the “standard” automobile insurance policy actually contains many different parts, each of which must be examined carefully to make sure it fits your needs. If you are a New Jersey resident you must read our recommendations regarding your lawsuit threshold options. New Jersey’s Auto Insurance law provides consumers with options that can significantly change an injured person’s right to compensation. After you review this article click the link to our discussion on the New Jersey changes.

Liability Coverage

Liability coverage protects you if you injure someone else in an accident. When an injured party makes a claim against you, your insurance company is obligated to defend and indemnify you up to the amount of liability coverage you have. We suggest an absolute minimum of $300,000 in primary liability coverage, and an umbrella policy of $1,000,000. This type of coverage adequately protects most individuals, but businesses and individuals with substantial net worth should carry additional umbrella insurance.

Uninsured and Underinsured Coverage

Uninsured (UM) and Underinsured (UIM or SUM in some policies) coverage provides you with additional protection if you are injured in an automobile accident and the responsible party does not have sufficient insurance coverage to compensate you for your injuries.

Unfortunately, many people carry large amounts of liability insurance coverage but only minimal UM and SUM coverage. The cost for additional UM and SUM coverage is minimal. You must make sure that you purchase the maximum amount of UM and SUM that your insurance company will sell you.

New York and New Jersey both have extremely low minimal insurance requirements – $15,000 in New Jersey and $25,000 in New York. The only people who purchase such low insurance policies are those that have nothing to lose – no assets and low income. No matter how much liability insurance you have, if you are hurt by someone with minimal coverage, unless you have purchased adequate UM and SUM coverage, you will not be able to recover adequate compensation.

SUM coverage works as follows: (1) In New York, if your liability coverage exceeds the responsible party’s insurance coverage, you may collect up to the limits of your UIM coverage, i.e., You have any injury worth $60,000. The responsible driver has $25,000 of insurance and you have $100,000 in liability insurance and $100,000 in UIM coverage You can collect $25,000 from the responsible party and an additional $35,000 from your own insurance company. Under the same circumstances, if your UIM coverage is only $25,000, you will only get the initial $25,000 from the responsible party’s company. Your company will not have to pay you anything, because your UIM limit was only $25,000.

(2) In New Jersey, you must compare the responsible party’s liability coverage with your UIM coverage. If your UIM coverage exceeds the other party’s liability coverage, you will be able to collect up to the limits of your UIM coverage. It is extremely important that you review your insurance policies and increase your UM/UIM coverage to the maximum amount your insurance company will provide.

Personal Injury Protection

Personal Injury Protection (or PIP) coverage options vary from state to state. We recommend purchasing the maximum available. This coverage provides your medical and lost wage benefits regardless of who caused the accident. Collision Insurance “Collision” coverage pays for repairing or replacing your damaged vehicle regardless of who caused the accident. You receive the cost of repair or the actual cash value of the vehicle whichever is less, minus your deductible. The higher your deductible, the lower your premium. If you were not at fault and if your insurance company recovers from the other driver’s insurance company you should receive a refund of your deductible. Collision coverage is usually mandatory on leased vehicles and for those vehicles for which banks have loaned money.

Summary

We recommend you review your insurance coverage with your broker annually. If you have any questions, feel free to call or email Barry S. Kantrowitz. If you are a New Jersey resident, please review our recommendations regarding the “Lawsuit Threshold” option. The law has changed. Be careful!

New Jersey Insurance Alert!

We are reaching out to all those who have had contact with our office over the years to provide guidance for renewing your New Jersey automobile insurance policy. The auto insurance law in New Jersey changed years ago and we have some critical consumer tips which we believe will protect you and your family.

Never Select The “Basic Policy”

Auto insurance companies offer a “basic policy” which only provides limited medical coverage and trivial liability coverage. No individual or family with any assets or income from a job should buy such a policy. Without liability coverage, you can be sued. If successful, a judgment can dramatically affect your financial future, your credit rating and even your ability to own or drive a car. Remember, Basic is Bad.

Get the Highest Uninsured/Underinsured Coverage

Uninsured/underinsured coverage protects you and your family if you are hit by a poorly insured driver. This coverage is critical! Since some drivers will continue to go without insurance, only have a small amount of insurance, or will elect the new “basic policy.” You need the highest uninsured/underinsured (UM/SUM) coverage possible. This is inexpensive and can be made as high as your liability coverage.

Get Good Liability Protection

Liability insurance is what protects your family and assets in the event you are charged with causing an accident. High liability protection can help assure you won’t be financially devastated. We recommend that you purchase no less than $300,000 bodily injury liability and uninsured/underinsured coverage, and an umbrella policy of at least $1,000,000.

On the Lawsuit Limitation Option

New Jersey law continues to offer you the option of giving up your rights to the court system in the event of an injury, in exchange for a large reduction in insurance premiums. Without those rights, though, even a prolonged injury may not be compensated. Weigh whether the cost savings offered is worth giving up your or your family’s ability to be fairly compensated in some circumstances if an accident should happen. We recommend that, if at all possible, you purchase the No Limitation on Lawsuit Option. You do not want the “Verbal Threshold” or “Limitation on Lawsuit” policies. Pay the extra money for complete coverage.

On Personal Injury Protection (PIP) Options and Medical Coverage

The law allows many different options regarding medical coverage. You want to maintain your right to choose your own doctor. Do not choose any plan requiring “precertification of all treatment” by an insurance company. Choose $250,000 PIP coverage, since many private health plans exclude treatment for auto injuries or require repayment to them from any compensation awarded to you.

Auto insurance law can be complicated! Call your broker to make sure you have the right coverage. If you need guidance when your policy comes up for renewal, we will be happy to provide that free-of-charge. Call personal injury lawyer Barry S. Kantrowitz at (866) 971-0927 or fill out a form on this site.