What Does "Limitation on Lawsuit" Mean in NJ?

lawsuit threshold attorney Hamilton, NJ
Were you involved in a car accident in New Jersey? If so, you have likely realized that the choices you made when selecting your own auto insurance policy are now potentially hurting you when you did not cause this accident! To most people, it makes no sense that something you selected on your policy has anything to do with the automobile accident you were just in.


​The limitation on lawsuit option used to be called a lawsuit threshold. Over the years, the name has changed to either be limitation on lawsuit or no limitation. It honestly depends on your policy and which carrier chose the words to use. Below are questions and concerns we are asked about a lot. If you have additional questions after reading, call us at 609-392-7600 to talk about your collision.
Q: If I am injured in an auto accident, can I make a claim or file a lawsuit against the person who was at fault for the accident?

A: The answer to this question mostly depends on the selections you made on your auto insurance policy. However, there are exceptions to the law, especially for those without an auto insurance policy. We recommend that you contact our law firm so we can discuss the specific facts involved in your accident to make a proper determination.


Q: My friend told me that I cannot sue the person at fault for the accident if I have the "limitation on lawsuit" option. Is this true?

A: This is not necessarily true. The "limitation on lawsuit," "verbal threshold," or "threshold" as it is often called, is a selection you can make when purchasing your auto insurance policy. You also have the option of selecting “no limitation on lawsuit” or "no threshold."


Q: What if I selected the "limitation on lawsuit" option. What does this mean?

A: This selection means that you have limited your legal rights to make a claim or file a lawsuit against another driver for pain and suffering resulting from the accident unless you sustained one of the following types of injuries: 
  1. Death
  2. Dismemberment
  3. Significant Disfigurement or Scarring
  4. Displaced Fracture
  5. Loss of a Fetus
  6. Permanent Injury (injury to a body part that has not and will not heal to function normally).


Q: What if I did not cause the accident? Am I still limited to what I selected on my policy?

A: Unfortunately, even if you did not cause the accident, you are still bound by the selections you made on your policy. This is because New Jersey is considered a "no fault" state. In an effort to make auto insurance premiums more affordable, our legislature enacted a statute allowing individuals to choose on their own auto insurance policy whether they wanted to be "limited" or "not limited" in filing a claim against an at fault driver. This choice is made when you purchase the policy. Unfortunately, most people do not understand what they are picking and often, make selections based on the cost.


Q: What if I selected the "no limitation on lawsuit" option?

A: If you made this selection, you are not limited in the type of injury you must have in order to file a claim or bring a lawsuit for pain and suffering.


Q: If I selected the "limitation on lawsuit selection," can I change it?

A: You can always contact your insurance carrier to change this option to "no limitation on lawsuit". However, once your auto accident has occurred, you are bound by the selections you made prior to the accident. You should still contact your insurance carrier to change this option and select the “no limitation on lawsuit” option to protect you and your family for any future accident that may occur.