If you get involved in an automobile accident in New Jersey, you will need to navigate the state’s no-fault laws. New Jersey is one of only 12 no-fault car insurance states. To make things more complicated, it uses a unique “choice” no-fault law. You may need assistance from a car accident attorney to understand New Jersey’s complex no-fault system and recover fair financial compensation after your car crash.
What Is the No-Fault Law?
A no-fault law means that after a car accident, both drivers (and all injured parties) file claims and seek compensation from their own car insurance providers, regardless of fault. It is not necessary to prove fault or establish negligence to qualify for no-fault insurance benefits. In a fault state, on the other hand, a crash victim can bring a claim against the at-fault driver but must prove the defendant’s fault as more likely to be true than not true.
What Are New Jersey’s Insurance Requirements?
In New Jersey, every vehicle owner must purchase and maintain the minimum required amounts of automobile insurance before registering the vehicle and driving on public roads. Currently, New Jersey law requires three different types of no-fault car insurance:
- Personal injury protection (PIP) insurance: pays for your medical expenses, as well as medical care for your passengers and members of your household, after a car accident, whether or not you were at fault for the collision.
- Liability insurance: pays for the damages suffered by others in an auto accident that you cause. The only liability insurance that is required in New Jersey is property damage liability coverage ($5,000). However, bodily injury liability insurance is also available for an additional cost.
- Uninsured motorist insurance: protects you financially if you are involved in an accident with a driver who is unlawfully driving without the proper insurance coverage in New Jersey.
Every driver in New Jersey must carry the minimum amounts of car insurance that are lawfully required, but it is always an option to increase the amount of coverage. The minimum amount of PIP coverage is $15,000 on a standard plan. However, most New Jersey drivers choose to purchase $250,000 in PIP insurance to cover serious or catastrophic injuries.
Limited Right to Sue vs. Unlimited Right to Sue Insurance
A “Basic” policy in New Jersey comes with only the required types of car insurance, listed above. Vehicle owners in the state also have the option of choosing a “Standard” policy, which includes bodily injury liability insurance. This will pay for the medical bills of others after an at-fault accident or if the policyholder is sued. With a Standard car insurance policy, a driver in New Jersey can choose between “limited” right to sue and “unlimited” right to sue coverage.
Limited right to sue costs less for the vehicle owner. With this type of insurance, an injured accident victim can pursue legal action against the driver at fault for the accident outside of New Jersey’s no-fault law and PIP coverage. However, this option is only available if the victim suffers a significant injury, such as permanent scarring or disfigurement, a displaced bone fracture, the loss of a body part, permanent injury, or the loss of a fetus. The death of an individual will also entitle a policyholder to sue the at-fault party.
With unlimited right to sue insurance, there is no injury threshold. After a car accident that causes any level of injury or damage, a victim with this type of insurance can file a claim against the at-fault party. A victim can also recover pain and suffering damages, which are not always available with the limited right to sue option. The tradeoff is that this insurance costs more money and the victim must prove that the third party is at fault for causing the car accident to qualify for coverage.
For more information about New Jersey’s complicated no-fault insurance system, contact a personal injury attorney to request a free car accident case consultation. Our personal injury lawyers serveHackensack,Teaneck,Bergen County,Union City and the entire state of New Jersey.
FAQs
What Is the No-Fault Law? A no-fault law means that after a car accident, both drivers (and all injured parties) file claims and seek compensation from their own car insurance providers, regardless of fault. It is not necessary to prove fault or establish negligence to qualify for no-fault insurance benefits.
Do insurance rates go up after no-fault accident in NJ? ›
In short: It's certainly possible your rates will increase if you're in a no-fault accident, but it's difficult to estimate the likely increase.
Who pays for car damage in a no-fault state in NJ? ›
So, in short, in a no-fault state like New Jersey, each driver involved in a crash would pay for their own medical bills, lost wages, and other accident-related bills regardless who is at fault by making a claim against their PIP. However, the at-fault motorist must still pay for the other party's vehicle repairs.
What are the pros and cons of no-fault insurance? ›
With no-fault insurance, premiums may be higher to account for the increased likelihood of claims being filed. For some drivers, the smoother claims process and reduced chance of a lawsuit may balance out higher monthly premiums. If you've got a clean record, at-fault insurance could mean lower premiums.
What happens with a non fault claim? ›
In a non-fault claim, your insurer will attempt to recover any repair or replacement costs from the other driver's insurance company.
Does your insurance go up after a claim that is not your fault? ›
Under California law, an insurer cannot increase your premiums when you aren't at fault.
How does insurance work when it's not your fault? ›
If you file a claim with your carrier when you are not at fault, your carrier will eventually begin a process called subrogation. Essentially, this means that once liability is determined, your insurance carrier will send a demand to the at-fault party's carrier to pay back the damages that were paid out to you.
Why do people hate no-fault insurance? ›
Higher premiums: No-fault states have higher insurance premiums than tort states because more coverage is required and fraud is more prevalent. Limited legal options: Drivers in no-fault states can only sue the at-fault driver if they are seriously injured or incur significant expenses.
What are the advantages of no-fault? ›
No-fault divorce allows couples to obtain a divorce without the need to outline the bad behaviour of their spouse or prove fault. This can make the process of obtaining a divorce simpler and less contentious, as the parties do not have to engage in any legal battles to prove who is at fault.
How many states have a pure no-fault law? ›
There are 12 no-fault states in the U.S.: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
Will my car insurance go up after an accident? Unfortunately, the simple answer to this is yes. Whether the accident was your fault or not, making a claim will usually lead to an increase in your car insurance premium the next year and you could see an increase even if you don't make a claim.
Will my insurance go up if I have protected no claims? ›
You have to pay for it, and the cost and number of times you can claim varies significantly across providers. Important. Having no-claims bonus protection will not stop your car insurance premium from increasing.
Can you make a claim if it was your fault? ›
It is therefore not possible to make a claim if you were entirely at fault for causing the accident. If you were partly at fault for causing the accident, then you may be eligible to make a claim. This is known as split liability or contributory negligence.
Do insurance rates go up after no fault accident progressive? ›
You may ask, will my insurance go up if I file a claim for an accident that isn't my fault? In some cases, yes — even accidents you didn't cause can increase your rate in states that allow it, as insurers have data showing that some drivers have a propensity for not-at-fault accidents.
How long does an accident stay on your insurance in NJ? ›
For example, in most cases, your state will keep a record of a car accident for three to five years. This is, in fact, the case for New Jersey, and drivers can access their driving records by accessing their Driver History Abstract on the MVC's website.
Does NJM raise rates after accident? ›
As a result, NJM Insurance car insurance customers should expect their rates to go up by around up to 48% after an at-fault accident, even if it's their first one.
Does your insurance go up after a claim that is not your fault in Geico? ›
Your rate won't increase if the accident is not your fault and the other driver's insurance pays for your claim, or if the damage is less than $750. Keep in mind that Geico also assigns points for other traffic offenses.
