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What Is The Automobile Insurance Cost Reduction Act And How Does It Affect Me?


If you live in New Jersey and own an automobile, The Automobile Insurance Cost Reduction Act affects you! Here’s what you need to know.

It may be hard to imagine, but choices you make on your insurance can affect your rights to recover if you are involved in an accident and injured, even though the accident is someone else’s fault! The Act also makes your own insurance responsible for medical bills that arise from car accidents.

New Jersey’s Automobile Insurance Cost Reduction Act has some serious implications for New Jersey drivers today, so here’s what is important for you to know. The goal of the Act was to reduce the cost of auto insurance, but it accomplished this by reducing benefits available to some people injured in motor vehicle crashes.

Through this Act, the State Legislature created restrictions for some people involved in car accidents, such as those who sustained injuries labeled “non-serious” or “non-permanent” to sue for pain and suffering. Unless you choose, “No Limitation on Lawsuit” Threshold on your insurance, your rights to bring a claim are significantly restricted.

The Act makes it much harder for some injured motorists and their families with potentially debilitating injuries to receive the compensation they deserve. By attempting to reduce the cost of auto insurance policies, the Act placed limitations on what claims an injured motorists can seek. For example, the “Limitation on Lawsuit” portion of the Act requires that a person (who has selected or defaulted to this insurance option) sustain one of these six injuries in order to qualify for noneconomic damages:

  1. Death
  2. Dismemberment
  3. Significant disfigurement
  4. Displaced fracture
  5. Loss of fetus
  6. Permanent injury

This threshold may not apply for individuals who were involved in crashes with commercial motor vehicles, such as tractor trailers, dump trucks, and taxis or some out of state drivers.

We believe that coverage for car accident expenses shouldn’t be limited, but that victims’ recovery should be proportionate to the accident and resulting harm. If you or a loved one was injured in a motor vehicle accident, entrust your case to our firm. We know how to navigate New Jersey laws concerning motor vehicle accidents, such as the Automobile Insurance Cost Reduction Act. Tell us about your case, and we’ll tell you how we could be able to help you.

Automobile accidents, especially when they result in injuries, can be complicated. With the additional restrictions created by the Automobile Insurance Cost Reduction Act, it is especially important to have experienced, knowledgeable representation on your side to get the financial compensation and benefits you need. At Levinson Axelrod, P.A., we have been fighting on the behalf of injured individuals for over 75 years. Call us today at (732) 440-3089 to schedule an appointment, or fill out our online form to request a free consultation with one of our New Jersey motor vehicle accident attorneys.

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