After a car accident in New Jersey, some drivers may be surprised to learn that a provision called limited tort in their insurance policy restricts their ability to recover for pain and suffering damages for injuries sustained in the collision. Limited tort or “limitation on lawsuit” is a provision that prevents the insured from suing for noneconomic damages unless their injury falls into one of six categories enumerated under the law. New Jersey personal injury attorney Edward Capozzi explains what limited tort means, how it can limit recovery in a car accident lawsuit, and the exceptions and strategies that permit recovery for full damages even under limited tort.
Edward Capozzi is a member at Brach Eichler LLC. Edward is based in New Jersey and concentrates his practice in auto, trucking, NJ Transit, products liability, and other catastrophic personal injury cases.
What is Limited Tort or Limited Right to Sue?
Limited tort in New Jersey limits the ability of drivers to sue for recovery of pain and suffering damages in a car accident. In New Jersey, drivers are required to choose between two options on their auto insurance: “Limitation on Lawsuit” or “No Limitation on Lawsuit.” “Limitation of Lawsuit,” also referred to as limited tort or verbal threshold, limits the car insurance policyholder from suing for noneconomic damages unless the injury falls into one of six categories. The “No Limitation on Lawsuit” option allows the policyholder to retain the ability to recover for noneconomic damages regardless of the type of injury sustained.
The intent behind this limitation in New Jersey is to limit lawsuits related to minor claims and reduce the cost of car insurance. Many New Jersey drivers choose the limited tort option because it results in lower premiums.
What Are the Six Categories of Limited Tort?
Under New Jersey’s Automobile Insurance Cost Reduction Act of 1998 (AICRA), the six categories of injuries are:
The permanent injury category acts as a catchall. An injury is considered permanent when the body part or organ will not heal to normal function even with medical treatment. Permanent injuries may include herniated discs or bulging discs. The injury must be proven by objective credible evidence such as MRI results. Although the purpose of AICRA was to reduce the number of car accident lawsuits, the permanent injury category has resulted in an increase in MRIs and numerous related lawsuits.
Exception to Limited Tort
Limited tort does not apply in certain instances, including when the injury is caused by a collision with a commercial vehicle not required to maintain personal injury protection coverage, like dump trucks and tractor trailers.
An Interview with Edward Capozzi — New Jersey
Personal Injury Lawyer at Brach Eichler
Joel Cohen (Host): Hello and welcome to TalksOnLaw. I'm Joel Cohen. Today, we're talking about car accident liability in a very specific way, in a specific region. We'll be talking about New Jersey’s limited tort law and we're joined remotely today by Ed Capozzi, an attorney based in New Jersey. Ed, welcome to TalksOnLaw.
Ed Capozzi: Thank you. It's nice to be here.
What is Limited Tort in New Jersey?
Host: Glad to have you virtually in our studio today. Why don't we get right into it. What does limited tort mean and why is it important?
Ed Capozzi: Limited tort is an option that's given to you on your insurance policy. So, in other words, when you purchase auto insurance, you typically get a discount for something called limited tort or limited right to sue, and it's exactly what it sounds like. It limits your right to sue unless you have one of six enumerated injuries.
Host: So, this is a way for policyholders to save money and insurance companies to save money by limiting the amount of damages that they generally pay?
Ed Capozzi: Yes, because if you purchase a policy and you have full tort, which means you could sue for anything, it almost doesn't make sense because. Even me as an attorney, I have the limited tort on my policy, because if I'm not injured, I don't want to sue anybody. It's a waste of everybody's time, so it does make some sense. However, insurance companies view it very differently.
Medical Exceptions to Limited Tort
Host: Why don't we talk about the actual criteria under limited tort in New Jersey. You have to meet one of a certain number of criteria?
Ed Capozzi: Yes, there are six categories that you have to meet. One would be death, which is obvious. One would be dismemberment, loss of a fetus, displaced fracture, significant scarring, or permanent injury.
Host: As you mentioned, some of these, most of the six, are pretty obvious. What about the last one: permanent injury? Could you give us an example of a type of injury that would meet that threshold?
Ed Capozzi: What the permanent injury typically leads to is a spine injury, spine injuries where there is a herniated disc or a bulging disc, or some disc injury seen on an MRI, because you have to prove it by objective credible medical evidence. So, what it did was when this law actually came into effect, I believe it was 1998, it just led to a boom in MRIs. I mean because you needed objective medical evidence and MRI facilities just — it went crazy. I think it had the opposite effect. They thought it would save money on medical costs but in actuality it increased the cost because everybody went for an MRI.
Host: And MRI scans are quite expensive themselves.
Ed Capozzi: About fifteen hundred dollars per scan.
Host: You're talking about a lawsuit, you're talking about a trial, what's the actual claim that's being made in such a case? Are you suing the insurance company?
Limited Tort Claims
Ed Capozzi: Yeah, well the complaint that you actually draft, the actual document itself, doesn't list the insurance company, it lists the person who is at fault for the accident. Whenever anybody is in an accident and you're being sued, you get served with a lawsuit. You typically send that lawsuit to your insurance carrier who provides you with a defense, an attorney, and economically pursuant to your insurance policy. So, in other words, if you have a policy with a bodily injury limit of $15,000, the insurance company will protect you up to $15,000.
Host: Are there examples of accidents in New Jersey where limited tort would not apply?
Ed Capozzi: Probably 95% of consumers have limited tort in New Jersey. It's very, very common; you see it on almost every policy. However, it can be voided by being involved in an accident with a commercial vehicle. So, in other words, if you get rear-ended by a tractor-trailer you automatically have zero tort.
Host: And, Ed, in your experience, any insights as to how contentious these issues are in court? The question of whether the limited tort threshold is reached.
Ed Capozzi: Now, as somebody who does this every day, and when I first got involved in this type of practice and this type of law, limited tort cases, the insurance companies drew a hard line in the sand and said we're trying every single one of them and nobody was really willing to try them, so nobody accepted these types of cases. So, if you had limited tort on your policy 15 or 18 years ago, nobody would accept them. I was one of the few attorneys that did accept them because when you know the inner workings of an insurance company and how they operate — which you you do as an attorney when you witness it and experience it every day — they don't fight the case on, for example they don't fight the case on permanency, because most of these whiplash type rear-end hit accidents, which is the majority of accidents and they're very serious, people always say, “Oh, it's a soft tissue injury,” “It's a soft tissue.” I've had a herniated disc and I've had surgery on it. It's the most painful thing you could ever experience. So when they say it's only a soft tissue injury, it's kind of insulting to somebody who's been injured, because if you've been injured and you have this type of injury from a car accident, it's real and it's extremely painful. So, the insurance companies, they won't fight you on whether or not it's permanent. They'll fight you on whether or not it was actually caused by the accident, which is something you have to prove, even in a zero tort piece. So that's the difference between a zero tort and a verbal threshold or a limited tort; it's the way the insurance company views it. It has nothing to do with what you have to do actually in court. It has to do with how an insurance company treats that case. If you have a limited tort, they'll fight you very hard. You have a zero tort, they won't fight you as hard, even though in court you have to prove the exact same thing.
Host: Ed Capozzi is an attorney in New Jersey. Ed, thanks for the time.
Ed Capozzi: You're welcome.