The verbal threshold, also known as the limited tort, the lawsuit threshold or the tort limitation, is a product of one of the biggest hoodwinking scams in New Jersey history.
A brief history is necessary. About two decades ago, automobile insurers were threatening to leave the State of New Jersey claiming that it was too costly to do business here. In response, they lobbied our Legislators in New Jersey to make it more difficult for those injured in automobile accidents to obtain fair compensation for their injuries.
Former law had incorporated a monetary threshold. Under that system, if you were hurt in a car accident, you could only recover for your injuries if your medical treatment expenses exceeded either $200 or $1700, depending upon which option you chose.
Under pressure from the insurance industry, the Legislature imposed an entirely new threshold scheme. The public now had the option of selecting the “no threshold” or the “verbal threshold” when obtaining auto insurance. Under the no threshold, any injury suffered in an auto accident entitled you to make a claim and recover fair value for your injuries. The verbal threshold, however, requires you to prove that in the accident you suffered death, dismemberment, significant disfigurement, fracture, loss of a fetus or any other injury, permanent in nature, which has not healed to function normally and will not heal to function normally with further treatment. (See NJSA 39:6a-8 for more details.)
If you made no active choice, as most policy holders did and still do, then the law provided you with a no threshold policy. If you actively chose the verbal threshold, you received a slightly lower premium but gave up important rights to sue for your injuries.
In other words, more knowledgable members of the public could make a choice to get better or worse coverage. Those less knowledgeable members of the public, who made no choice, were given the better “no threshold” by law.
Several years later, the insurance industry again lobbied the Legislature to change the law so that those members of the public who made no active choice on the threshold were given the poorer coverage; the coverage which restricts your right to seek fair compensation for your injuries - the verbal threshold. In return, the insurance lobbyists assured the Legislature that premiums for auto coverage would be significantly reduced. With that promise in mind, the Legislature changed the law so that those not making an active choice received the verbal threshold. The result was that insurers paid out on less claims since nearly 85 percent of the public ended up with the verbal threshold. In addition, despite their assurances, auto insurance premiums continued to rise!
Those of you reading this article are probably thinking to yourselves that you have never heard of the threshold scheme and don’t know which threshold you have. In fact nearly 9 out of 10 of those reading this article are covered by the verbal threshold. Your rights have been restricted without your knowledge or consent courtesy of the Legislature, the very people elected by you to safeguard your rights. To be sure, our legislature should be embarrassed at being hoodwinked by the insurance lobbyists.
The verbal threshold can easily be manipulated by unscrupulous physicians hired by the insurance companies to defend auto injury lawsuits–so called “hired guns.” Since the question of whether an injury is permanent or not is based upon the opinions of doctors, the hired guns routinely write reports arguing that the injuries suffered by a litigant are not permanent. Quite frequently, these experts convince jurors that a personal injury claimant has not suffered permanent injuries and thus is not entitled to fair damages for their injuries.
You can easily change the threshold by calling your agent or insurer directly and demanding an immediate change from the verbal threshold to the no threshold. While there is additional cost associated with the no threshold, it is well worth the additional premium. This change can be made at any time in your policy period, not only on renewal. You owe it to yourself and your family to be protected to the greatest extent provided by the law.