Town Topics, January 5, 2005 Legal Forum:
"Your Automobile Insurance Policy"
by Charles F. Harris, Esq.Reprinted with permision of the Town Topics.
As a personal injury attorney, I find prospective clients have not read what is offered to them by their automobile insurer and, for the most part, opt into coverages they find unsatisfactory once they’ve suffered an automobile accident. When I ask them the reason for their selection of the particular type of coverage, almost universally the answer is cost. Many acknowledge they did not read the buyers guide provided by the insurer, nor analyze the different coverage options available.
One of the cheapest available options is the so-called “basic policy” created by the Automobile Insurance Cost Reduction Act of 1998 (AICRA). However, it is important to know that the “basic policy” does not provide third party liability coverage, which means that the insured is not protected from a claim by a party who may have been injured in the accident. It affords only minimal personal injury protection, no medical expense benefits, and no uninsured/underinsured benefits coverage. The “basic policy” does not afford the right to pursue a claim for injuries sustained and limits the right to commence a lawsuit. Effectively, the “basic policy” leaves the insured to his/her own devices, including the costs of defending oneself against any claims and engaging one’s own attorney. Additionally, the “basic policy” insured has no recourse when struck by an uninsured or under-insured motorist. In short, a “basic policy” holder risks financial disaster. Finally, should the basic policy holder not have the financial means to satisfy a judgment rendered against him/her, he/she is in jeopardy of having his/her drivers license revoked by the New Jersey Motor Vehicle Commission for not being “financially responsible.”
Individuals considering their coverages should also review their selection of the lawsuit threshold option. Frequently individuals sustaining injury as a result of an automobile accident find that they are personally exposed and have no recourse against someone else who caused their injuries. AICRA established a new standard in determining an injured person’s right to sue, commonly known as “threshold” questions. Statistics indicate that up to 90% or more of those drivers with automobile insurance have what is commonly known as a “limitation on lawsuit option.” This means that the insured has a “verbal” threshold which they must overcome in order to have standing to make a claim or to bring a lawsuit for pain, suffering and permanent injury. Unless it can be established that the individual sustained one of the six types of listed injuries (death, dismemberment, significant disfigurement, displaced fractures, loss of fetus, or permanent injury) the insured does not overcome the threshold question and has no basis for a claim. The interpretation of AICRA by the courts has resulted in a significant limitation on what constitutes a “permanent injury” further restricting an injured party’s ability to make claim for pain, suffering or permanent disability.
In sum, individuals seeking automobile insurance for the first time, or those renewing existing automobile insurance policies should either take the time to read the buyers guide provided to them by the insurance company or consult with a professional (insurance agent or attorney) before they select the type of policy or the benefits afforded. Price should not be the only consideration when purchasing automobile insurance.
Practice Areas | History | Attorneys | Media Coverage | Contacts
Clients | Employment | Newsletter | Directions | Disclaimer | Home© 2004 by Mason, Griffin & Pierson, PC
