In 1998, the New Jersey Legislature passed the Automobile Insurance Cost Reduction Act, more commonly referred to as AICRA. This new law gave New jersey residents the option to buy either a standard policy or a basic policy. A standard policy offers a wide range of options and under law, you must purchase the minimum limits of three coverages:
- Personal injury Protection –As we explained before, PIP pays for any injuries you and your passengers sustain after an accident, no matter who is at fault.
- Liability Coverage – Such as bodily injury or property damage.
- Uninsured/Underinsured Motorist – This means if you get into an accident with a driver who doesn’t have enough or has no insurance, this will pick up any extra costs.
There are also optional coverages such as collision and comprehensive under a standard policy.
A basic policy is much different. This policy provides minimum coverage with little to no protection in certain areas, such as personal liability, property damage or medical expense benefits. It also doesn’t provide uninsured or underinsured motorist coverage. The purpose of this basic insurance policy is to give consumers a cost-effective option – this means you can have cheap car insurance so you’re not breaking the law. However, the basic policy is more of a problem than a solution. If you have this type of coverage and get into an accident, you’ll quickly learn that you’re going to be paying many of your expenses out of pocket.
The AICRA also provides several initiatives to combat insurance fraud as well as to cut costs. For instance, you can choose either verbal threshold or no threshold. This gives you the option of whether you can sue or not for non-economic damages such as pain and suffering. If you have selected the verbal threshold option, then you can sue for non-economic damages as long as you sustained one of the following injuries:
- Dismemberment
- Significant disfigurement
- Loss of a fetus
- Fracture
- Permanent loss or use of a body organ, member, function, or system
- Significant limitation of use of a body function or system
- Medically determined injury or impairment
- Death
So how does this relate to my car accident claim? As you can imagine, if you don’t have the right insurance policy with the right benefits, then it will cost you in the end.
Is it possible to pursue legal action if you have the most basic of coverage? It may be difficult and it’s best to speak with an experienced car accident lawyer to go over your options. If you were in a car accident in New Jersey, get assistance now. Contact the Law Offices of Anthony Carbone today for a free consultation.