Is New Jersey a No-Fault State? PIP, Right to Sue, Your Claim

Yes. New Jersey is a no-fault state. Every car insurance policy sold here must include Personal Injury Protection (PIP), which pays your medical bills after a crash no matter who caused it. However, New Jersey is a “choice” no-fault state. Fault still decides who pays for your car, and you can sue for pain and suffering if your injury is serious enough or if you chose the unlimited right to sue on your policy.

Key things to keep in mind:

• Your own PIP coverage pays your medical bills first, regardless of fault (N.J.S.A. 39:6A-4).
• Damage to your car is not a no-fault claim. It goes through the at-fault driver’s insurer or your own collision coverage.
• Many New Jersey policies carry the “limitation on lawsuit” option, also called the verbal threshold. It limits pain-and-suffering lawsuits to six categories of injury, including permanent injury (N.J.S.A. 39:6A-8(a)).
• Drivers who choose the “no limitation on lawsuit” option can sue for pain and suffering for any injury caused by someone else’s negligence.
• Economic losses that PIP does not cover, including medical bills above your PIP limit and lost wages, can be claimed against the at-fault driver either way (N.J.S.A. 39:6A-12).
• A New Jersey injury lawsuit generally must be filed within two years of the crash (N.J.S.A. 2A:14-2).

Is New Jersey a no-fault state?

New Jersey is a no-fault state for medical bills, not for everything. Under the state’s no-fault law (N.J.S.A. 39:6A-1 and following), every standard auto policy must carry PIP, which pays for your treatment “without regard to negligence, liability or fault of any kind.” Fault still governs vehicle damage and any lawsuit for pain and suffering, and your right to sue depends on the option you picked when you bought your policy.

The “choice” part is the lawsuit option. When you buy a standard policy, your insurer must ask you to choose between the “limitation on lawsuit” option (the verbal threshold, or limited right to sue) and the “no limitation on lawsuit” option (the unlimited right to sue). If you never signed a form making a choice, the law treats you as having chosen the limitation (N.J.S.A. 39:6A-8.1(b)).

Why do I use my own insurance when the crash was not my fault?

New Jersey’s no-fault law makes your own PIP coverage the first payer for your injuries, regardless of who caused the crash. Using it is not an admission of fault, and it does not let the other driver off the hook. It simply means your medical treatment can start right away through your own policy while fault is sorted out separately through the at-fault driver’s liability coverage.

This is the question we hear most from new clients in Newark, East Orange, and Paterson. Here is how the claims split up:

• Your injuries go to your own PIP. Emergency room care, follow-up visits, physical therapy, imaging, and prescriptions are paid up to your policy’s medical limit without waiting for a fault decision.
• Your car goes to the at-fault driver’s insurer. Vehicle damage is not a no-fault claim. You file a claim against the other driver’s property damage liability coverage, or you use your own collision coverage and let your insurer recover the money from the other company.
• Anything PIP does not cover goes to the at-fault driver. This includes pain and suffering (if you clear the injury threshold or have the no-limitation option), lost wages beyond what PIP replaces, and medical bills above your PIP limit.

Using your PIP does not weaken your injury claim against the other driver. Under N.J.S.A. 39:6A-12, what PIP already paid cannot be used as evidence in your lawsuit against the at-fault driver, and the jury is instructed not to guess about it. The two claims run on separate tracks.

What does PIP pay for in New Jersey?

PIP pays four kinds of benefits: medical expenses, income continuation (partial lost wages), essential services (help with tasks you can no longer do at home), and death and funeral benefits. The medical expense benefit matters most after a crash, and its size depends on the limit you chose on your policy, ranging from $15,000 up to the $250,000 default.

Here is how those benefits break down. For claim deadlines and a full walkthrough, read our explainer on how PIP works in New Jersey.

• Medical expenses. A standard policy provides $250,000 per person per accident unless you chose $150,000, $75,000, $50,000, or $15,000 in writing (N.J.S.A. 39:6A-4 and 39:6A-4.3). Even with a lower limit, PIP pays up to $250,000 for a permanent or significant brain injury, spinal cord injury, or disfigurement, and for treatment of other permanent or significant injuries at a trauma center or acute care hospital until you are stable (N.J.S.A. 39:6A-4.3(e)).
• Basic Policy. The Basic Policy carries $15,000 of PIP medical coverage, with the same $250,000 allowance for catastrophic injuries.
• Deductible and copay. The standard PIP deductible is $250, though you can choose a higher deductible of $500, $1,000, $2,000, or $2,500 in exchange for a lower premium. A 20 percent copay also applies to bills between your deductible and $5,000 (N.J.S.A. 39:6A-4.3).
• Income continuation. This pays up to $100 per week and $5,200 total under the basic benefit, and never more than your actual net earnings.
• Essential services. This pays up to $12 per day and $4,380 total to pay someone for household tasks you cannot do while hurt.
• Death and funeral benefits. Unpaid income and essential services benefits pass to a surviving spouse, children, or the estate, plus up to $1,000 toward funeral costs.

Health insurance as primary. You can choose to have your health plan pay first for crash injuries in exchange for a lower PIP premium. PIP then covers what the health plan does not, up to your PIP limit. If you picked this option but had no health coverage on the day of the crash, PIP still pays, though you will have an added $750 deductible (N.J.S.A. 39:6A-4.3).

Who PIP covers. PIP covers you and family members in your household, whether you were in your own car, in someone else’s car, or walking or biking when a car hit you. It also covers passengers in your car who do not have PIP of their own. When a crash injures several people in one family, each person’s benefits are tracked separately.

Can I sue the at-fault driver in New Jersey?

Yes, in two situations. If your policy has the “no limitation on lawsuit” option, you can sue the at-fault driver for pain and suffering for any injury. If your policy has the “limitation on lawsuit” option, you can sue for pain and suffering only if your injury falls into one of six categories set by N.J.S.A. 39:6A-8(a). Economic losses that PIP does not cover can be claimed either way.

The limitation option is called the “verbal threshold” because the law defines the threshold in words (categories of injury) rather than a dollar amount of medical bills. The six categories are:

1. Death
2. Dismemberment
3. Significant disfigurement or significant scarring
4. Displaced fractures
5. Loss of a fetus
6. A permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement

What counts as a “permanent injury”?

The statute defines an injury as permanent “when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment.” This is the category most of the clients we represent rely on. Whether an injury qualifies depends on objective medical evidence rather than the name of the diagnosis. For example, a herniated disc confirmed on an MRI with lasting symptoms may qualify, while a muscle sprain that heals within a few weeks will not.

You also need a physician’s certification. Within 60 days after the defendant formally answers your lawsuit, your treating doctor (or a board-certified doctor they referred you to) must certify under penalty of perjury that you suffered a qualifying injury. That certification must be based on “objective clinical evidence” like an MRI or nerve study, not just on the pain you report feeling. The court can grant one extension of up to 60 days for good cause. New Jersey’s Model Civil Jury Charge 5.33 tells jurors the same thing: permanence must be proven by objective, credible medical evidence.

You do not have to prove a “serious life impact”

For years, courts added an extra hurdle requiring you to show that the injury had a serious impact on your daily life. The New Jersey Supreme Court removed that hurdle in DiProspero v. Penn, 183 N.J. 477 (2005), ruling that the statute contains no “serious life impact” test. If your injury fits one of the six categories and your doctor certifies it with objective evidence, you have cleared the threshold. How much the injury changed your life still matters, but it goes toward the value of your claim, not whether you are allowed to bring it.

What if the crash aggravated an old injury?

You can still clear the threshold, but the proof you need changes. In Davidson v. Slater, 189 N.J. 166 (2007), the Supreme Court held that a plaintiff who does not claim aggravation of a pre-existing condition does not need to produce comparative medical evidence separating old symptoms from new ones. However, when your case is based on an aggravated prior injury, you do need medical evidence comparing your condition before and after the crash. If you had a prior back or neck problem, tell your lawyer early so we can gather the older records and address them head-on.

Clearing the threshold is where a New Jersey car accident lawyer does some of the most important work on your case: reviewing your lawsuit option, lining up the right imaging and specialist reports, and getting the doctor’s certification filed on time.

What is the No Limitation on Lawsuit option?

The “no limitation on lawsuit” option, also called the unlimited right to sue, means you keep the right to sue the at-fault driver for pain and suffering for any injury, with no threshold to clear (N.J.S.A. 39:6A-8(b)). It costs more each month because the insurer gives up the lawsuit protection that the verbal threshold provides. It is available only on a standard policy; the Basic Policy does not offer it.

Here is how the two options compare side by side:

• Pain and suffering lawsuit: Under the Limitation on Lawsuit (verbal threshold), you can sue only if the injury is death, dismemberment, significant disfigurement or scarring, a displaced fracture, loss of a fetus, or a physician-certified permanent injury. Under No Limitation on Lawsuit (unlimited right to sue), you can sue for any injury caused by another driver’s negligence.
• Economic losses (medical bills above PIP, lost wages, out-of-pocket costs): Recoverable from the at-fault driver under both options.
• Cost: The Limitation on Lawsuit option comes with a lower premium, and the selection form must show you the savings (N.J.S.A. 39:6A-8.1(a)). The No Limitation on Lawsuit option carries a higher premium.
• Which policies offer it: The Limitation on Lawsuit option applies to a standard policy (by choice or by default), the Basic Policy (required), and the Special Automobile Insurance Policy (required). The No Limitation on Lawsuit option is available on a standard policy only, by written election.

Your choice applies to all cars you own and to your spouse and children living in your household who are not named insureds on another policy. It carries over on every renewal until you sign a form changing it (N.J.S.A. 39:6A-8.1).

Basic Policy vs Standard Policy: what changes?

The Basic Policy is the cheapest legal way to insure a car in New Jersey, and it leaves you with the least protection after a crash. It carries only $15,000 of PIP, no uninsured motorist coverage, no bodily injury liability unless you add a $10,000 option, and it locks you into the limitation on lawsuit automatically. The standard policy is the only one that lets you choose your lawsuit option and carry higher coverage.

The table below compares what you get under a Standard Policy, a Basic Policy, and a Special Automobile Insurance Policy (SAIP):

As the table shows, only the Standard Policy includes uninsured motorist coverage and the option for an unlimited right to sue, while the Basic Policy and SAIP leave significant gaps if a serious crash happens.

Sources: DOBI’s Standard Policy and Basic Policy pages, and DOBI Bulletin 25-06 on the liability minimums that took effect January 1, 2026 under P.L. 2022, c. 87.

What can I recover outside PIP?

Everything PIP does not pay can be claimed against the at-fault driver as economic loss, regardless of which lawsuit option you have. That includes medical bills above your PIP limit, unreimbursed deductibles and copays, lost wages beyond the income continuation benefit, and other out-of-pocket costs. The verbal threshold limits only non-economic damages, meaning pain, suffering, and loss of enjoyment of life.

This was not always settled law. In 2019, the New Jersey Supreme Court held in Haines v. Taft that a driver who chose a lower PIP limit could not recover medical bills above that limit from the at-fault driver. The Legislature stepped in within months. P.L. 2019, c. 244, signed August 15, 2019, amended N.J.S.A. 39:6A-12 to state that “all medical expenses that exceed, or are unpaid or uncovered by any injured party’s medical expense benefits personal injury protection limits, regardless of any health insurance coverage, are claimable by any injured party as against all liable parties.” Those excess bills are valued using New Jersey’s automobile medical fee schedule, not the hospital’s raw sticker price.

“Claimable” does not mean “automatically paid.” You still need to prove the other driver was at fault. If you were partly responsible for the crash, your recovery is reduced by your share of fault, and it is barred completely if your share is more than 50 percent (N.J.S.A. 2A:15-5.1). Our post on filing a claim when you were partially at fault walks through that math. The at-fault driver’s liability limits also cap what their insurer will actually pay, which is why the value of a case depends on both the severity of the injury and the insurance coverage available.

How no-fault works in special situations

Pedestrians and bicyclists hit by a car

If a car hits you while you are walking or biking, you still get PIP. The law defines a “pedestrian” as anyone not in a motor-powered vehicle, which includes bicyclists (N.J.S.A. 39:6A-2). PIP comes first from your own auto policy or, if you do not have one, a household family member’s policy (N.J.S.A. 39:6A-4.2). If no one in your household has an auto policy, other state sources of PIP may be available, and we track them down for you. A pedestrian who is not required to carry PIP and is not covered by a family member’s policy is not bound by the verbal threshold (N.J.S.A. 39:6A-8(b)).

Motorcycle riders

A motorcycle is not considered an “automobile” under the no-fault law. Because of that, motorcycle policies are not required to carry PIP, and an injured rider generally cannot claim PIP as a pedestrian either (Koff v. Carrubba, 290 N.J. Super. 544 (App. Div. 1996)). Medical bills typically go through your health insurance first and then become part of your claim against the at-fault driver’s liability coverage. Whether the verbal threshold applies to your pain-and-suffering claim depends on whether you also own a car insured with the limitation option; if you do, expect the defense to argue that it applies even when you were riding a motorcycle.

Out-of-state drivers and out-of-state policies

If you live in New York or Pennsylvania and were hurt in New Jersey, the “deemer” statute (N.J.S.A. 17:28-1.4) comes into play. It requires any insurance company licensed to do business in New Jersey to provide at least New Jersey’s minimum PIP and liability coverage whenever the insured car is driven here. It also automatically assigns the limitation on lawsuit option to the named insured and their immediate family. In plain terms, if your out-of-state insurer does business in New Jersey, you generally have to clear the verbal threshold even though you never chose it. We handle these cross-border claims regularly.

Commercial vehicles

Vehicles used for business are generally not considered “automobiles” under the no-fault statute (N.J.S.A. 39:6A-2), though whether a specific work vehicle qualifies depends on how it is registered, used, and insured (Favell v. Hernandez, 261 N.J. Super. 348 (App. Div. 1992)). If a commercial vehicle hits you while you are in your own personal car, your PIP and lawsuit option work just as described above, and your injury claim goes against the commercial carrier’s liability policy, which often carries higher limits. If you were riding in a work vehicle, which policy pays your medical bills depends on the specific policies involved, and workers’ compensation may step in if you were on the clock. Rideshare crashes add another layer, because the coverage that applies depends on whether the rideshare driver was logged into the app, waiting for a ride request, or carrying a passenger. Commercial and rideshare cases are a priority for our firm. Our documented results include a $2.5 million settlement for a woman struck by a commercial van who needed two spinal surgeries; past results do not guarantee future outcomes.

Driving without insurance

This is the harshest rule in New Jersey’s system. If you owned the car you were driving and it was uninsured at the time of the crash, N.J.S.A. 39:6A-4.5(a) says you have “no cause of action for recovery of economic or noneconomic loss.” You cannot sue the at-fault driver for pain and suffering or even for your unpaid medical bills, even if the crash was entirely their fault. The same bar applies to a driver convicted of DWI in connection with the accident (N.J.S.A. 39:6A-4.5(b)). Because the rule targets the person who failed to insure their vehicle, passengers in an uninsured car are generally in a different position and can still bring a claim.

The Special Automobile Insurance Policy for Medicaid recipients

The Special Automobile Insurance Policy (SAIP) is available for $365 per year to drivers enrolled in federal Medicaid with hospitalization. It covers emergency treatment immediately after a crash and treatment for serious brain and spinal cord injuries up to $250,000, plus a $10,000 death benefit. It does not cover routine follow-up care, liability if you hurt someone else, or damage to your car. SAIP holders are automatically subject to the limitation on lawsuit option (N.J.S.A. 39:6A-8), so bringing a pain-and-suffering claim requires a threshold injury.

Will my insurance go up if the accident was not my fault?

Under New Jersey’s insurance eligibility point rules, only an “at-fault accident” adds accident points to your driving record. By law, that requires both that you were at least partly responsible for the crash and that your insurer paid at least $1,000 on the claim (N.J.A.C. 11:3-34.3). A crash caused entirely by the other driver does not meet that definition, so it should not trigger an accident surcharge.

The rule also specifically excludes several common situations from adding points:

• Your car was lawfully parked when hit.
• You were hit by a hit-and-run driver and reported it to the police within 24 hours.
• The other driver was convicted of a moving violation in connection with the crash and you were not.
• You were rear-ended and were not convicted of a moving violation.

One honest caveat: premiums can still go up at renewal for reasons that have nothing to do with your crash, including statewide rate increases and the higher mandatory liability minimums that took effect in 2026. If your bill jumps after a not-at-fault crash, ask your agent in writing which rating factor changed. If the company is wrongly treating the crash as your fault, you can challenge it through DOBI’s consumer assistance unit.

How long do I have to file a lawsuit after a New Jersey car accident?

You generally have two years from the date of the crash to file a personal injury lawsuit (N.J.S.A. 2A:14-2), and two years from the date of death for a wrongful death claim (N.J.S.A. 2A:31-3). If you miss the deadline, the court will dismiss your case and you lose the right to sue, no matter how strong the facts are.

Two years is shorter than it sounds, especially when you have the verbal threshold on your policy. To prove an injury is permanent, you usually need to complete the first phase of medical treatment so a doctor can say, backed by objective testing, that the injury will not heal normally. That medical process alone takes months. When you add the time needed to gather hospital records and negotiate with the insurance adjuster, the two-year window closes faster than most people expect. Different deadlines apply when a child is hurt, and claims involving government vehicles require a formal notice within just 90 days; our post on how long you have to file a personal injury claim in New Jersey covers those exceptions. The goal is not to panic, but to get clear answers early while all of your options are still open.

What should I do after a crash, and how long will a claim take?

For a step-by-step checklist of what to handle in the first few days, read what to do immediately after a car accident in North Jersey. For a realistic look at the timeline from treatment to resolution, see how long it takes to settle a car accident case.

What does a lawyer do in a no-fault case?

Most people who call our Montclair office after a crash are trying to get medical care, get their car fixed or replaced, make up for missed work, and figure out what the insurance company wants them to sign, all while in pain. Here is what we take off your shoulders:

• The insurance calls become ours. We open the PIP claim, deal with the adjusters, and handle requests for recorded statements. You don’t need to call the insurance company again; that’s ours to carry now.
• We check every policy. We review your PIP limits and lawsuit option, the at-fault driver’s liability limits, any commercial or rideshare policies, and your own uninsured or underinsured motorist (UM/UIM) coverage. Finding every available source of recovery is the core of our motor vehicle accident practice.
• We build the threshold proof from day one. We make sure you are seeing the right specialists, getting appropriate diagnostic imaging, and have the physician’s certification filed on time so your claim isn’t tripped up by a technicality.
• We negotiate your unpaid medical bills. Through established relationships with local medical providers, we work to reduce outstanding balances so less money comes out of your final settlement.
• One attorney owns your case. The same lawyer stays with you from the day you sign up to the day your case resolves, alongside a dedicated paralegal you can reach by phone or text. We return calls and messages within 24 hours, and we never accept or reject an offer without your informed consent.

Our entire team works in both English and Spanish, from your first phone call through settlement, and your immigration status has no bearing on your right to bring an injury claim in New Jersey. If getting to our Montclair office is hard while you recover, we will gladly meet you at your home or in the hospital. Our documented results include a $1.875 million settlement for a man T-boned at an intersection who needed a cervical fusion; past results do not guarantee future outcomes.

Frequently asked questions about New Jersey no-fault insurance

How do I know which lawsuit option I have?

Check the declarations page of your auto insurance policy or the coverage selection form you signed when you bought it. Look for the line that says either “limitation on lawsuit” (limited right to sue) or “no limitation on lawsuit” (unlimited right to sue). If you cannot find the page or aren’t sure how to read it, we can look at your policy declarations page with you and tell you in two minutes.

Can I use my own doctor under PIP?

Yes. New Jersey does not require you to use a doctor chosen by your car insurance company, and the state Department of Banking and Insurance (DOBI) prohibits insurers from forcing you into a specific network to get your treatment approved. However, your insurer can require precertification (advance notice and medical justification) for certain treatments and testing after the first 10 days following the crash, and your care must follow the state’s standard medical protocols. See our post on how PIP works in New Jersey for more details.

What if the other driver has no insurance or leaves the scene?

Your own PIP coverage still pays your medical bills. For pain and suffering, lost wages, and other losses, you turn to the uninsured motorist (UM) coverage on your own standard auto policy, which steps into the shoes of the missing or uninsured driver. If the other driver has insurance, but their policy limits are too low to cover what they put you through, your underinsured motorist (UIM) coverage can make up the difference up to your own policy limits. Note that the Basic Policy does not include UM or UIM coverage. If you are in a hit-and-run, report it to the police right away, as New Jersey’s insurance rules look for a police report filed within 24 hours.

Let’s talk through it

If you were hurt in a crash anywhere in New Jersey and the no-fault rules are leaving you unsure whether you have a case, tell us what happened. A New Jersey car accident lawyer at Birkhold & Maider will review your lawsuit option, your PIP limits, and the insurance coverage on the other side, and give you a straight, honest answer about where you stand. The consultation is free, in English or Spanish, and you pay no fee unless we recover money for you. Call 973-319-7795 or contact us online; we answer new calls 24 hours a day.