Threshold Election affects your ability to sue.
Under New Jersey Law, your ability to sue the driver at fault for an accident is entirely dependent on your threshold election. When you purchase a standard auto insurance policy, you must make a choice about the rights you will have if you are injured in an automobile accident.
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. It also applies to your uninsured motorist coverage and, more likely than not, to your underinsured motorist coverage.
There are two Threshold types—the Unlimited Right to Sue (or “Zero Threshold” as it is more commonly known) and the Limited Right to Sue (or “Verbal Threshold”).
The difference between threshold elections affects the ways you can sue
The Unlimited Right to Sue allows you to sue the negligent driver for pain and suffer arising from any injury—whether severe or not. Of course, the value of your case will still be determined by the type of injury you have, the length of treatment and the final prognosis.
The Limitation on Lawsuit Option only allows you to sue the negligent driver for your pain and suffering if you sustain one of the permanent injuries listed below:
- loss of body part
- significant disfigurement or significant scarring
- a displaced fracture
- loss of a fetus
- 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.)
The cost difference between each threshold election is substantial
Of course, you should keep in mind cost in threshold election.
The Limited Right to Sue (“Verbal Threshold”) is substantially cheaper than the Unlimited Right to Sue (“Zero Threshold”), so you must make a decision as to what you can afford. Although it is cheaper, remember that Verbal Threshold limits your ability to sue. Also, the law does not allow you to sue the insurance company or its agents, regardless of the threshold or coverage you elect. So do your homework.