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2 car insurance options that impact compensation

Individuals who are involved in automobile crashes often face considerable financial issues while they deal with the effects of the crash. One thing that some people might not realize is that a decision they make when they obtain car insurance can impact their ability to seek compensation after the wreck. 

New Jersey uses a concept known as the verbal threshold to determine what options a person has to seek compensation. When you purchase an auto insurance policy, you’re asked to choose to limit your rights in exchange for a lower insurance premium or to retain your right to be able to seek compensation at will. 

Determining which coverage type you need is often a challenge because you probably hope that you’ll never need to seek compensation but you may also have a desire to cut your auto insurance bill. 

For individuals who opt to use the verbal threshold option, which limits your right to sue, filing a civil lawsuit for damages for pain and suffering is only possible in very limited options. According to the Automobile Insurance Cost Reduction Act of 1998, these include:

  • Death
  • Dismemberment
  • Fetus loss
  • Scarring or disfigurement that’s severe
  • Fractures (displaced only)
  • An injury that is permanent and won’t heal to normal functioning levels

Anyone who’s suffered an injury in a car crash should check their policy to find out what’s possible. Even if you chose the option that limits your rights, working with an attorney can help you to evaluate what you can do. Once you know this, you can determine how to handle the situation. Your attorney can help to protect your interests throughout the process.