Every driver in New Jersey must carry vehicle insurance to help cover their losses after a crash. However, many accident victims are unsure how to proceed when their damages overcome their insurance policy limits. Fortunately, our attorneys can guide you on what to do next to get the compensation you need.
In nearly every case, the best thing to do when your car accident costs exceed your policy limits is to file a lawsuit. Some negligent drivers do not have any or enough coverage if you file a third-party claim against them. If your uninsured or underinsured coverage cannot compensate or you have a basic policy, a lawsuit might be the only way to recoup your losses. A lawsuit will allow you to claim any financial losses left over after exhausting your policy and other non-economic damages your insurance will not cover. If you have pain and suffering like most car accident victims do, you can recover those losses in your lawsuit.
Contact Agrapidis & Maroules, P.C. today at (201) 777-1111 for a free case assessment with our New Jersey car accident lawyers.
What Do I Do if My New Jersey Car Accident Claim Is More Than My Insurance Policy Limits?
New Jersey is a no-fault insurance state, so recovering compensation when an accident claim goes beyond policy limits is more challenging. No-fault coverage, referred to as “Personal Injury Protection” (PIP), limits car accident victims’ right to sue in only certain situations. It is also only designed to cover financial losses, like medical bills. Considering that the minimum amount of coverage drivers must have in NJ is $15,000 in bodily injury coverage per person, knowing what to do next after exceeding their medical expenses and lost wages is a common issue for many. However, you might not exceed your policy limit in the first place, as PIP will cover up to $250,000 where victims suffer significant or permanent brain or spinal cord injuries, disfigurement, or other serious injuries treated at an acute care hospital or trauma center.
Our car accident lawyers in New Jersey can review what type of policy you have and what compensation it offers. If you selected a basic policy without additional coverage, we can help you file a third-party claim with the other driver’s insurance. If the other driver’s insurance is insufficient to cover your remaining losses, your uninsured or underinsured motorist insurance might be able to cover the gap. However, we will need to file a lawsuit if those methods are unsuccessful. However, you must have either suffered serious injuries or have a standard policy without limitations on your right to file a third-party insurance claim or a lawsuit.
Filing for PIP Coverage
Before getting to the defendant’s insurance, no-fault rules require you to file for PIP benefits first to cover medical expenses and lost wages if you have a limited right to sue policy. That will bring down the amount of compensation you are pursuing from the defendant, so you might not reach their policy limits as quickly, depending on how much coverage they have. However, we typically only turn to the defendant’s insurance once your PIP coverage is exhausted.
Filing a Third-Party Claim
In a third-party claim, you demand that the negligent driver’s insurance company cover the damages their policyholder caused. They will investigate and review the evidence submitted by both parties to determine your potential liability and provable damages. They will deny the claim if they believe the evidence shows you were more at fault.
However, you cannot file a claim at all unless you have a “no limitation on lawsuit” option in your standard policy, as per N.J.S.A. § 39:6A-8(b), or “serious injuries.” If your standard policy lacks this option or you have a basic policy, you must show that you suffered serious injuries, as defined by § 39:6A-8(a). To do this, evidence from your doctors and other medical experts must be submitted to certify that you suffered serious injuries in the accident.
Once we file the claim, we can determine what the defendant’s insurance can cover and its limitations. Hopefully, the defendant has a standard policy. Bodily injury liability in these policies will cover at least $25,000 per person and $50,000 per accident, with a maximum of $250,000 per person and $500,000 per accident. A defendant’s standard policy can also cover between $25,000 and $100,000 or more of property damage, depending on the policy limits.
However, many drivers do not have bodily injury liability since it is optional in basic policies. If the defendant did opt for coverage, it might be as low as $10,000 for all victims in the accident. Basic policies will also only cover property damage up to $5,000.
In these cases, we must find an alternative to compensation, like your uninsured or underinsured motorist insurance. These options are only available in a standard insurance policy. They will cover bodily injury and property damage when a defendant does not have insurance or who does have coverage but not enough to compensate your damages. If you have a basic policy or have exhausted this coverage, the next option to consider is filing a lawsuit.
Filing a Lawsuit
Like third-party claims, you must have a right to sue or sustained serious injuries to file a lawsuit. The major issue with filing a lawsuit against a defendant who lacked enough insurance to cover your losses is that they might be “judgment proof,” meaning they do not have the money to pay you. Even if you get a judgment in your lawsuit, you will still be responsible for your losses since the defendant is broke.
If you were awarded a judgment that the defendant cannot pay, it makes you a “judgment creditor.” This will potentially allow us to levy the defendant’s property or income to satisfy the judgment.
Contact Our Car Accident Lawyers Located Throughout New Jersey for Help with Your Claim Today
For a free case review with our Jersey City, NJ car accident attorneys, call Agrapidis & Maroules, P.C. at (201) 777-1111.