What is the verbal threshold?

The verbal threshold stems from the New Jersey law establishing a no-fault insurance system, passed in 1988 and since amended, that restricts a motorist’s right to sue for injuries sustained in an accident in exchange for a lower insurance premium. When obtaining insurance, a motorist who selects the zero threshold option faces no limitation on seeking recovery for noneconomic damages — such as pain and suffering — from an auto accident. The premium for such coverage will be more expensive, though, which leads many people to opt for the less expensive, but more restrictive, verbal threshold option.

The consequences of selecting the verbal threshold option, however, can be costly should the insured become a victim in an auto accident. In that case, under the most recent amended law passed in 1998, as a plaintiff, the injured party would have to prove that a “verbal threshold” was reached through one of the following six circumstances in order to seek compensation for noneconomic damages:

• 1) death;
• 2) dismemberment;
• 3) significant disfigurement or significant scarring;
• 4) displaced fractures;
• 5) loss of a fetus; or
• 6) permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.