New Jersey operates under a no-fault insurance system, meaning that after a car accident, your own insurance covers your medical bills and other expenses, regardless of who was at fault. While this system is designed to streamline claims and reduce litigation, many drivers are confused about their rights, coverage limits, and whether they can sue the at-fault party for additional damages.

This guide explains how no-fault insurance works in New Jersey, including:

• What Personal Injury Protection (PIP) covers
• When you can file a lawsuit outside the no-fault system
• How comparative negligence laws impact compensation
• Steps to take after an accident to protect your claim

Understanding these factors is critical to ensuring you receive the maximum compensation for your injuries and losses.

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What Is New Jersey’s No-Fault Insurance System?

Under New Jersey’s no-fault law, drivers must carry Personal Injury Protection (PIP) insurance, which pays for medical expenses and certain economic losses after an accident—regardless of who caused the crash.

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According to the New Jersey Department of Banking and Insurance, minimum PIP coverage includes:

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1. Medical expenses for necessary treatment

2. Lost wages if injuries prevent you from working

3. Essential services such as household help if your injuries limit mobility

4. Death benefits for surviving family members if the accident is fatal

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However, PIP does not cover vehicle damage or pain and suffering, which leads many accident victims to wonder whether they can pursue additional compensation.

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Can You Sue for Additional Damages in a No-Fault State?

While New Jersey’s no-fault system limits lawsuits, accident victims may sue for damages beyond PIP coverage under certain conditions. Whether you can step outside the no-fault system depends on the type of insurance policy you selected:

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1. The "Verbal Threshold" (Limited Right to Sue)

Most NJ drivers choose the verbal threshold (or limitation on lawsuit), which restricts their ability to sue for pain and suffering unless the injuries meet a “serious injury” threshold, such as:

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

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2. The "Zero Threshold" (Unlimited Right to Sue)

Drivers who opt for the unlimited right to sue (also called zero threshold) retain the ability to sue the at-fault driver for pain and suffering, regardless of injury severity.

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How Comparative Negligence Affects Compensation in NJ

New Jersey follows a modified comparative negligence rule, meaning your compensation can be reduced if you are partially at fault for the accident.

For example:

• If you are 20% at fault, your damages are reduced by 20%.
• If you are more than 50% at fault, you cannot recover damages from the other party.

Understanding how fault is determined is essential, as insurance companies may try to assign partial blame to reduce payouts.

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Steps to Take After a Car Accident in New Jersey

If you’re involved in an accident, taking the right steps can protect your rights and maximize compensation:

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1. Call 911 and seek medical attention immediately – Even minor injuries can worsen over time.

2. Document the accident scene – Take photos, videos, and witness statements.‍

3. Notify your insurance company – File a PIP claim as soon as possible.

4. Avoid admitting fault – Anything you say can be used against you.

5. Consult a personal injury attorney – If your injuries are severe or if there’s a dispute over coverage, legal representation can help maximize your claim.

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Conclusion

New Jersey’s no-fault insurance system is designed to provide quick access to medical coverage, but understanding its limitations is crucial. If your injuries are severe or your PIP benefits are insufficient, you may have the right to file a lawsuit for additional compensation.

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At our law firm, we fight to protect accident victims’ rights and ensure they receive the full compensation they deserve. Contact us today for a free, no-obligation consultation to discuss your case and explore your legal options.i