Does it Matter If I Live in a Fault or No-Fault State?


Does it Matter?

Yes, it matters.  Most people in the United States are required by law to maintain insurance on their vehicles. Why? The simple answer is that accidents happen and people get injured in those accidents. When they do, insurance helps cover these costs.

You may have heard the term “no-fault insurance.” What does this mean? If there’s “no fault,” what do you have to go to court for?

If I live in a state with mandatory car insurance, does it matter if it is a “no-fault state”?  As we will see below, the answer is yes.

States With No-Fault Insurance Laws

New Jersey is a “no-fault state.”

No fault insurance coverage is also known as Personal Injury Protection or “PIP” coverage. The main difference between no-fault and fault-based insurance is that all drivers in no-fault states must buy personal injury protection (PIP) coverage. This is your medical coverage for injuries you (and others) suffer in a motor vehicle accident. PIP pays if you or other persons covered under your policy are injured in an auto accident. It is sometimes called “no-fault” coverage because it pays your medical expenses no matter who caused the auto accident.

PIP or “no fault” coverage has two parts:

  1. Coverage for the cost of treatment you receive from hospitals, doctors and other medical providers and any medical equipment that may be needed to treat your injuries
  2. Reimbursement for certain other expenses you may have because you are hurt, such as lost wages and the need to hire someone to take care of your home or family.

    You may purchase both parts of PIP coverage or medical treatment coverage only, depending upon your needs.  To recover PIP benefits, the injured person must file a claim with her or his own insurance carrier. It doesn’t matter who was at fault for the accident – hence the term “no fault” insurance.

States like New Jersey have implemented no-fault insurance laws in order to eliminate auto accident lawsuits over medical bills. It was hoped that these laws would lower the overall cost of car insurance. As you know from paying your insurance bills, however, that didn’t happen. 

Another way insurance costs were supposed to be held in check was by restricting drivers’ right to sue for pain and suffering.  Under this type of policy, drivers can only sue when their injuries meet a certain threshold. Some states, like New Jersey and Pennsylvania, have a “verbal threshold” for injuries, while Kentucky, for example, has a monetary threshold that must be met to seek out a lawsuit.   Under the monetary threshold (which New jersey used to have), a person can only sue if his or her medical bills meet a certain amount. By contrast, the “verbal threshold” law provides a description of the type of injury an accident victim must have in order to be able to sue for pain and suffering. Generally speaking, the most common type of injuries which meet the “verbal threshold” are “permanent” injuries.

What About Choice No-Fault States?

Some states let drivers choose what type of coverage they want. Drivers can either purchase a no-fault policy that includes personal injury protection, or they can buy a traditional liability policy. Other states also have add-on policies, which lets the motorist get personal injury protection without any restrictions on lawsuits.  In New Jersey, a vehicle owner may choose not to be bound by the verbal threshold and therefore need not sustain a “permanent” injury in order to sue for pain and suffering. That policy will cost more but it affords you greater protection because it does not limit you to being able to sue for pain and suffering only if your injuries are permanent or otherwise meet the “verbal threshold.”

The Role of Fault in New Jersey

Fault is an issue if, following an accident, you make a claim for pain and suffering or if someone makes such a claim against you.  If you are injured and make a claim for damages due to your pain and suffering, you must prove that the other driver or drivers were at fault and more at fault than you.  Where medical bills are concerned, though, it does not matter who is at fault. Bills should be submitted to your own insurance company for payment under you “no fault” (PIP) coverage.

Contact a Perth Amboy Personal Injury Lawyer to Discuss Your Car Accident Case in New Jersey

Did you or a loved one sustain serious injuries due to a car accident in New Jersey? Don’t let the medical bills pile up while you wait for the negligent party or their insurance company to do the right thing. Right now, you need an aggressive personal injury attorney on your side, fighting to get you the compensation you need, want, and deserve. The skilled, experienced attorneys at CourtLaw represent clients injured because of car accidents in Perth Amboy, East Orange, Newark, Jersey City, Trenton, New Brunswick, Old Bridge, and throughout New Jersey. Call 866-632-4211 or fill out our online contact form to schedule a free consultation about your case. We have an office conveniently located at 163 Market Street, Perth Amboy, NJ 08861 as well as offices in New Brunswick, Roselle, East Orange, Jersey City, Elizabeth, Linden, Newark, Paterson, South Amboy and Trenton.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

For over a decade, CourtLaw has represented me and my family on matters related to car accidents and personal injury cases. I am extremely satisfied with the work the firm has performed. In addition, the staff is professional, friendly, and efficient. I highly recommend Karim Arzadi to those seeking a good lawyer.
I am very pleased for the great legal support that CourtLaw has provided to me and my family throughout the years we have been clients of this firm. I highly recommend CourtLaw and their team of attorneys.
The entire staff at CourtLaw were supportive to me and my family and provided excellent representation in my car accident case from the beginning of the case to the successful settlement. I highly recommend Karim Arzadi to anyone who needs an excellent and caring attorney. He fights hard for his clients.

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