New Jersey Car Accident Settlement Example

Here's what an insurance settlement might look like after a car accident in New Jersey.

Neil is driving through a parking lot in Jersey City when a driver suddenly backs out of a parking space. Neil can’t react fast enough and hits the other car broadside. Neil’s steering wheel spins as a result of the collision, and his right wrist is caught in it.

The police come and call an ambulance for Neil. At the hospital, the doctors put Neil in a cast and refer him to an orthopedist for follow up. Neil sees the orthopedist several times, and, when the cast is removed six weeks later, is referred to physical therapy so that he can get his flexibility and strength back. After four weeks of physical therapy, Neil is discharged and told to continue with his exercises at home for another month. Finally, six months post-injury, Neil feels recovered. Neil is a carpenter and is right-handed, and so he missed two months of work because of the injury.

Watch the Statute of Limitations

Even though New Jersey is a no-fault car insurance state, Neil needs to be aware of New Jersey’s statute of limitations, which is a law that sets a deadline for filing a lawsuit.

In New Jersey, the statute of limitations for car accidents is two years. This means, if you were involved in a car accident as a driver, passenger, pedestrian, or property owner, you have two years from the date of the accident to file a lawsuit in the state’s courts.

Why is this law so important? If your injuries are serious enough that New Jersey’s no-fault insurance system permits you to make a claim against the driver who caused the accident, but you don’t file a lawsuit within the time period set by the statute of limitations, your case is over unless you fall within one of the very limited exceptions that might stop the clock.

New Jersey’s Shared Fault Rule

If Neil’s injuries are serious enough to permit him to file a lawsuit against the other driver (rather than simply making a no-fault claim under his own insurance coverage), he needs to be aware of New Jersey’s rules of comparative negligence because the person that hit him could claim that Neil was negligent himself for driving too fast through the parking lot and for not being able to stop in time when the other driver pulled out of the parking space.

New Jersey has what is called a “modified comparative fault” rule. The crux of it is that if you are found to be in part negligent with respect to your injury, your award of damages is diminished in proportion to your fault, up to a certain point. If, for example, you were awarded $150,000 in damages, but were found to be 10% at fault, your damages would be reduced to $135,000. However, if you were found to be 50% or more at fault, you would receive no damages whatsoever from the other driver(s).

In order to maximize your potential recovery, whether you go to trial or just settle the case with the defendant’s adjuster, you want to make absolutely sure that the adjuster knows that you did nothing wrong. (Learn more about Proving Fault for a Car Accident.)

Should You Settle the Claim?

Under New Jersey’s “choice no-fault law,” an injured person makes a claim against his/her own car insurance policy first, and, only if the injuries are serious enough is a claim against the other driver possible.

In Neil’s case, let’s assume that his injuries are serious enough to permit him to make a liability claim against the other driver. His out-of-pocket (compensatory) damages total $34,500. The breakdown looks like this:

  • $14,000 in medical bills (ambulance, hospital, doctors and physical therapy)
  • $18,000 lost income
  • $2,500 in vehicle damage

Neil and his attorney decide that another $75,000 in damages is appropriate to compensate for Neil’s pain and suffering in connection with the accident, and they make an initial demand of $115,000 to settle the claim. After negotiating with the insurance adjuster, Neil accepts a final settlement of $65,000.

As mentioned above, you want to settle your claim or file a lawsuit (or at least turn the case over to a lawyer) well before the two-year deadline set by New Jersey's statute of limitations expires. But you also don’t want to settle it too early -- meaning before you are either fully recovered or are as good as you are going to get. This is known as reaching "maximum medical improvement" or MMI. In Neil’s case, he was at MMI, and so he was ready to settle.

Learn more about Settling a Car Accident Case.

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