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New Jersey Deemer Statute and the Lawsuit Threshold

Don’t Drive in New Jersey.

When you cross the bridge into New Jersey you may be giving up certain legal rights that you have paid for. I am referring to the unfettered right to sue for personal injuries. Even if you paid an extra premium to your auto insurer, when you cross into the Garden State, you most likely lose the coverage you paid for.

To illustrate, in Pennsylvania, when you purchase auto insurance you select either full tort or limited tort. With full tort, you can sue over even minor injuries caused by another motorist. If you select limited tort, for a reduced premium, you give up the right to sue for anything but serious injuries. There are exceptions to this rule, but that is the general idea.

You would think that by paying extra for full tort coverage, you would not be restricted by the severity of the injury. That’s true while you are in Pennsylvania, but once you cross into New Jersey, the situation changes drastically. If your insurance company writes insurance in New Jersey, you are subject to New Jersey’s Lawsuit Threshold. This is called the “deemer” law. Almost every major insurer writes in the Garden State other than Erie Insurance Company. So if you live in Pennsylvania but drive in NJ a lot, you should consider contacting an Erie agent.

The New Jersey Lawsuit Threshold severely limits the right to sue. If you are deemed to have selected lawsuit threshold you can recover damages only if you fit into one of the categories that qualify under Lawsuit Threshold. You can expect a much harder battle to get your case settled.

If you are subject to lawsuit threshold, you cannot recover damages for your injuries unless you prove with objective evidence that you have suffered one or more of the following:

• Death • Dismemberment • Loss of a fetus • Significant disfigurement or significant scarring • Displaced fracture • Permanent injury

The situation is similar in New York. Regardless of your Pennsylvania tort option, if you drive in New York, you are subject to New York’s version of the “lawsuit threshold”. New Jersey residents who pay extra for “no threshold” are nevertheless subject to New York’s threshold when driving in New York.

To satisfy New York’s “serious injury threshold”, the categories are:

• Death • Dismemberment • Significant disfigurement • Fracture • Loss of fetus • Permanent loss of use of a body organ, function or system • Permanent consequential limitation of use of a body organ or member • Significant limitation of use of a body function or system • Medically determined injury of a non-permanent nature that prevents person from performing substantially all of the material acts that constitute the person’s usual and customary activities for not less than 90 of the first 180 days following the injury

This doesn’t really seem fair. But it is unquestionably the law since the courts have upheld it. The courts reason that when you cross into another state, you waive your unfettered right to sue and subject your self to the laws of the host state. Since you are benefiting from their roadways and other governmental services, you lose the benefit of your bargain. The host state is more concerned with protecting its citizens from lawsuits than it is with fair compensation of out of state residents.

Just something to think about when crossing the bridge. Drive carefully.

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