Does New Jersey Verbal Threshold Apply to Lyft and Uber Accidents?
As a result of the overwhelming popularity of ride share apps such as Uber and Lyft, almost all state legislatures have created new laws to regulate ride share technology products in order to protect consumers. In 2017, New Jersey rolled out statewide legislation known as the “Transportation Network Company Safety and Regulatory Act” which can be found at Sections 1 through 27 of P.L.2017, c.26 (C.39:5H1 et seq.) This act created new regulations that are specific to ride share companies which use transportation networks to set up pre-arranged rides.
New Jersey Uber and Lyft passengers are some of the biggest benefactors of this Act. This is because, the law requires ride share companies to carry a greater amount of liability insurance than the standard NJ auto insurance policy. In addition, the statute provides that if you are injured by a negligent Uber or Lyft driver in New Jersey, you will not be subject to New Jersey’s infamous verbal threshold.
New Jersey “Limitation on Lawsuit” or Verbal Threshold Insurance
New Jersey is notorious for having some of the highest car insurance rates in the nation while, at the same time, offering the least protection to its motorists. One of the largest wins for the automobile insurance lobby was the enactment of the Automobile Insurance Cost Reduction Act (AICRA) passed in 1998 which created “limitation on lawsuit” or “verbal threshold” insurance.
Under verbal threshold, the vast majority of New Jersey residents give up their right to sue for noneconomic damages (pain and suffering) caused by a car accident in exchange for lower insurance premiums. Even some motorists who have not elected the lawsuit limitation, are deemed to have given up their right to sue for economic damages under the guise of benefiting from New Jersey’s PIP scheme.
Fortunately, many Uber and Lyft passengers have been spared from the New Jersey verbal threshold bar on recovery. The Transportation Network Company Safety and Regulatory Act, Section C.39:5H10(j) provides that:
- The limitation on lawsuit option set forth in subsection a. of section 8 of P.L.1972, c.70 (C.39:6A8) shall not be assertable by a transportation network company or a transportation network company driver in any action for damages arising from a prearranged ride or be asserted against any party not receiving personal injury protection benefits in any action for damages arising from a prearranged ride.
Thus, if an Uber or Lyft driver is found to be at fault in an accident which causes injury to the passenger, the passenger will not be subject to NJ’s verbal threshold (a/k/a limitation on lawsuit option) and instead, will be permitted to recover the value of his/her noneconomic damages without limitation. In addition, other parties injured in an Uber or Lyft accident, who do not receive PIP benefits, will not be bound by the verbal threshold in actions against the ride share company.
Disclaimer: This articles if for informational purposes only and is not legal advice. It may be out of date or contain errors.