The State of New Jersey adopted the Automobile Insurance Reparation Reform Act (known as the No Fault Act) in 1972. The act provides that every standard automobile liability insurance policy shall contain personal injury protection (PIP) benefits, without regard to fault, including medical expenses up to $250,000; income continuation up to $5,200; essential services up to $4,380; death benefits up to $9,580; and funeral expenses up to $1,000. N.J.S.A. 39:6A-4.
As initially enacted, the No Fault Act barred civil suits for “soft-tissue injuries” unless the claimant’s medical expenses exceeded a monetary threshold (originally $200 and later increased to $1,500). The act was amended in 1988 to replace the “monetary threshold” with a “verbal threshold”: a description in words of the type of injury that would permit an accident victim to recover damages for noneconomic loss (defined as “pain and suffering”).
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