Personal Injury Claims Under New Jersey’s No-Fault Insurance Law
According to the National Transportation Safety Board, an auto accident occurs every ten seconds. Not surprisingly, auto accidents are the most common type of personal injury cases filed with our courts. New Jersey is one of several states with a "no-fault" auto insurance law. No-fault insurance is an often misunderstood concept, and no-fault insurance law varies greatly from state-to-state. The purpose of this article is to offer an overview of New Jersey's No-Fault Insurance Law in view of the recent New Jersey Supreme Court opinion in the DiProspero v. Penn case.
New Jersey's No-Fault Insurance Law
The term "no-fault" commonly refers to an auto insurance program that allows policyholders to recover from their own insurance company, regardless of which party is at fault. Under no-fault law, motorists may sue for severe injuries and for pain and suffering only if the case meets certain conditions or a "threshold". In some states, this threshold is expressed in verbal terms (a descriptive or verbal statement of the injuries incurred), while in other states, the threshold is monetary, based on dollar amounts of medical bills.
When New Jersey originally enacted no-fault insurance law in 1973, it followed a monetary threshold. In 1988, the New Jersey legislature changed the threshold to a verbal one. In 1992, the New Jersey Supreme Court ruled that in order to meet the requirements of the verbal threshold, the injury sustained must have a "serious impact" on the plaintiff's life. The language defining the threshold was further modified in 1998 when the state law was completely revised with the passage of the Automobile Insurance Cost Reduction Act (AICRA).
AICRA provides insurance policyholders with the option of paying lower premiums in exchange for limiting their right to sue for non-economic damages. The statute's "limitation on lawsuit" threshold restricts an accident victim from suing for non-economic damages unless the victim suffers a bodily injury that results in death; dismemberment; significant disfigurement or significant scarring; displaced fractures; loss of a fetus; or a permanent injury other than scarring or disfigurement.
Effect of the DiProspero Case
In Berlin, New Jersey, Barbara Penn failed to observe a "yield" sign and crashed into a vehicle driven by Christina DiProspero. As a result of the accident, DiProspero suffered neck and back pain that required two years of chiropractic and medical treatment. DiProspero filed a lawsuit seeking compensation for pain and suffering. DiProspero was covered by a no-fault insurance policy subject to the limitation on lawsuit threshold.
DiProspero claimed that she suffered permanent injuries as a result of the accident and included certifications from her doctors attesting to the permanent nature of her injuries. The trial court granted a summary judgment motion in favor of the defendants on the basis that there was no evidence that the injuries had a serious impact on DiProspero's life. The appellate court affirmed the grant of summary judgment.
However, in June of 2005, the New Jersey Supreme Court reversed the lower court, unanimously ruling that the "serious life impact" test that was applied under the previous verbal threshold to limit when plaintiffs could file for non-economic damages did not apply after the enactment of AICRA. The court determined that lawmakers did not intend to carry forward the serious life impact test when they enacted AICRA. The court held that new legislation would be required to extend the requirement of the serious life impact test.
Critics of the DiProspero ruling say that removing the serious life impact criteria will lead to more lawsuits, resulting in an increase in cost in the legal system which will eventually result in higher insurance premiums for consumers. However, consumer advocates have noted that plaintiffs must still meet the criteria set forth in AICRA, and while some cases that initially were unable to proceed due to the inability to satisfy the serious life impact test are now able to go forward, the DiProspero ruling has not opened the floodgates for litigation.
Experienced Counsel is Essential in Evaluating Your Potential Case
We are dedicated to helping New Jersey families receive fair compensation after a car, truck, motorcycle or other vehicle accident. If you have been injured, you should consult with an experienced attorney to discuss how New Jersey's no-fault law may impact your ability to recover for your injuries. We invite you to contact us for a free consultation and review of your legal rights.
Resources on Vehicle Safety and Insurance
If you are interested in learning more about New Jersey's no-fault insurance law, the following resources provide useful information regarding vehicle insurance, safety and other consumer information:
Federal Trade Commission Web site provides useful consumer information on purchasing, leasing, or renting vehicles: www.ftc.gov/bcp/menu-auto.htm
Insurance Institute for Highway Safety provides injury, collision & theft loss information on recent vehicle models: www.iihs.org/
Insurance Information Institute provides answers to consumer's questions regarding insurance: www.iii.org/individuals/auto/
National Safety Council provides information on driver safety, including air bag and seat belt safety: www.nsc.org/issues/drivsafe.htm
