NJ Car Insurance – Automobile Insurance Cost Reduction Act (AICRA)

The Automobile Insurance Cost Reduction Act (AICRA) provides policyholders with the choice of lower premium payments in exchange for limiting their right to sue for noneconomic damages.

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That option, the “limitation on lawsuit” threshold, restricts an accident victim covered by the policy from suing for noneconomic damages unless the victim suffers a bodily injury which results in death; dismemberment; significant disfigurement or significant scarring; displaced fractures; loss of a fetus; or a permanent injury other than scarring or disfigurement.

The “verbal” threshold, the predecessor to the limitation on lawsuit threshold, required the accident victim to prove that her injury satisfied one of nine statutory categories in order to qualify for recovery of noneconomic damages.

In Oswin v. Shaw, (Oswin), the New Jersey Supreme Court concluded that under the verbal threshold, in addition to proving that her injury fit within one of the nine categories, the victim had to prove that she suffered a serious life impact. AICRA’s limitation on lawsuit threshold does not contain language requiring that an accident victim prove that the injury caused a serious life impact.

This appeal addresses whether Oswin’s serious life impact standard applies to AICRA’s limitation on lawsuit threshold

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