How Do I Choose Between NJ Auto Insurance Right-to-Sue Options?
When New Jersey drivers go to purchase a standard car insurance policy, they will have to decide whether they want to opt for a limited or unlimited right to sue. While there are significant pricing implications that come with this decision, it should really depend on whether drivers are OK with forfeiting their right to take another driver to court for pain and suffering that resulted from any type of injury caused by that other driver.
According to regulators, those who choose the limited route will still be able to sue for pain and suffering damages for certain types of catastrophic injuries. The following are those exceptions:
- loss of a body part
- significant scarring or disfigurement
- displaced fracture
- loss of a fetus
- permanent injury (an injury in which a body part, organ or both will not be able to function normally again, even with further medical treatment)
The incentive for opting for a limited right to sue is a pretty significant reduction in premiums.
Since insurers often have to pay huge sums for pain and suffering damage awards, the more motorists who voluntarily decline their unlimited right to sue means potentially less money that will be spent on claims settlements. So coverage providers cut premiums for those who limit their suing rights.
Limiting Right to Sue Could Cut Premiums Significantly
According to a premium comparison from the state's Department of Banking and Insurance, policies with the unlimited right to sue cost on average 40 percent more than the same policy but with a limited right to sue.
The price of retaining the right to sue varied a great deal between insurers, though. Among the 53 insurers included in the sample rate comparison, policies with the unlimited right to sue cost as much as 101 percent more and as little as 6 percent more than an identical policy but with a limited right to sue.
If a premium reduction is the reason pushing a policyholder to dramatically cut their means of legal recourse, he or she should ask an insurer directly about the extent to which premiums would be cut.
Those with Basic Policies Do Not Have a Choice
In addition to standard policies, basic policies that include reduced amounts of coverage are also available to New Jersey drivers as a low cost auto insurance option.
Motorists who choose to go with a basic policy automatically are outfitted with a limited right to sue.