In March 2019, the New Jersey Supreme Court handed down a decision affecting potentially millions of motorists in the State of New Jersey and having a direct impact on potential monetary recoveries exceeding Personal Injury Policy (“PIP”) limits during litigation.

What does this mean for you?

The New Jersey Supreme Court decided Haines v. Taft, persons injured in auto accidents selecting lower PIP amounts on their auto insurance were permitted to collect expenses over and above that amount (collectable as “economic” expenses).  As a result, a plaintiff who selected a PIP limit of, e.g., $15,000, would be entitled to recover medical expenses totaling, e.g., $50,000.

Taft has weighed in on this issue under a very select set of circumstances. In that case, the plaintiffs sought recovery of their medical expenses in amounts exceeding their $15,000 PIP coverage.  The defendants argued that permitting the plaintiffs to collect monies over and above their PIP limits would effectively undermine those members of the public selecting and paying for $250,000 PIP coverage.

The trial courts ruled in favor of the defendants and precluded the plaintiffs from offering evidence of expenses exceeding the $15,000 PIP limits.  The Appellate Division reversed. The Supreme Court reviewed the question and determined that, in those circumstances, such expenses were not admissible.  It held that interpreting the Automobile Insurance Cost Reduction Act (AICRA) as permitting admission of evidence of medical expenses falling between a PIP limit and presumptive PIP amount of $250,000 was contrary to the intentions of the Act.  The goals of the Act, the Court ruled, would be undercut by the ability of a party to sue for medical expenses above their PIP limits but below $250,000—meaning that a person who chose a lower PIP amount could get a higher reward. 

But hope is not lost for those selecting a lower PIP limit.

Taft left a question mark over and in cases involving different facts.  Our law firm has taken up the issue on two separate occasions in response to motions to the courts and has received favorable results.  Trial judges have shied away from concluding that Taft precludes recovery of economic damages in any cases involving lower PIP limits. 

Nevertheless, the impact of Taft on New Jersey drivers is being felt.  Attempts to settle lawsuits with auto insurance companies often involve adjusters disputing or even denying payment of benefits above the PIP limits in light of the Supreme Court’s ruling.  Unwittingly, drivers may preclude their own potential recoveries based on their selected PIP limits. Motorists selecting a $15,000 PIP limit will doubtless face legal challenges if injured in an accident and sustaining economic damages over and above $15,000.  

Unless and until the Legislature takes and clears up the issue, litigation will doubtless continue. But we are not convinced that trial courts directly confronting the issue (or the Appellate Division when it reaches it) will conclude that the Supreme Court meant to preclude all drivers selecting lower PIP limits from recovering for greater economic losses.  While we would recommend that drivers bear this issue in mind when initiating or renewing auto insurance coverage, we remain committed to doing all that we can to getting injured motorists and passengers reimbursement for their damages.

Hire Experienced Personal Injury Lawyers

Contact the Law Offices of James C. DeZao today at (973) 358-6134 if you have been injured in a car accident. Our experienced personal injury attorneys are here to help you through this challenging time in your life and will work tirelessly to get you the full compensation you deserve.