Accidents across the New Jersey and New York line

New Jersey and New York share bridges, tunnels, highways, buses and commuter trains. They do not share auto insurance systems. Both states use no-fault insurance for medical bills, but the coverages, the rules for suing over pain and suffering, and the lawsuit deadlines are all different.

When you live in one state and get hurt in the other, several questions come up at once. Whose insurance pays your medical bills? Which state’s injury threshold do you have to meet? Where can you sue, and how long do you have? This guide explains the rules we could confirm in the statutes and published court decisions. The answers often depend on details like which company insures your car, so treat this as background and have a lawyer review your facts.

Why the state line matters

New Jersey’s no-fault coverage is called PIP (personal injury protection). Drivers with the limitation on lawsuit option, often called the verbal threshold, can sue for pain and suffering only if the injury falls into one of six categories, such as a displaced fracture or a permanent injury.⁴ Our guides to New Jersey PIP and the verbal threshold explain these in detail.

New York’s no-fault system pays basic economic loss, and in a lawsuit between “covered persons” over a crash in New York, there is no recovery for pain and suffering unless the injured person has a “serious injury” as the statute defines it.⁷ See our guides to New York no-fault and the serious injury threshold.

Because the two systems differ, the same injury can open the door to a pain and suffering claim under one state’s rules and not the other’s. That is why the cross-border rules below matter.

New Jersey’s deemer statute

New Jersey has a law that reaches into out-of-state insurance policies. It applies to any insurer authorized to do auto insurance business in New Jersey, or controlling, controlled by or under common control with such an insurer, that sells auto policies in another state or in Canada. Each of those policies must include New Jersey PIP coverage, along with liability and uninsured motorist coverage, whenever the insured vehicle is used or operated in New Jersey.¹ The law is called the deemer statute because the policy is “deemed” to include that coverage.

The statute also sets the lawsuit rules. The named insured and immediate family members under such a policy are subject to New Jersey’s limitation on lawsuit threshold.¹

The New Jersey Supreme Court upheld this tradeoff in Whitaker v. DeVilla. An out-of-state insured whose carrier does business in New Jersey receives New Jersey PIP benefits and, in exchange, must meet the verbal threshold to recover for pain and suffering.² The Court later explained in Zabilowicz v. Kelsey that the threshold applies even if the person chose and paid for full tort coverage on the out-of-state policy.³

There is an important limit. In Zabilowicz the Court held that a defendant who wants to use the limitation on lawsuit threshold against an injured person must show that the defendant is eligible for New Jersey PIP benefits. In that case the at-fault out-of-state driver’s insurer was not covered by the deemer statute, so that driver could not invoke the threshold.³ The other driver’s insurance can therefore change whether the threshold applies to you at all.

New York’s rules for out-of-state drivers

New York has a similar law. Every insurer authorized to do business in New York, or controlling, controlled by or under common control with such an insurer, that sells auto liability coverage in any state or Canadian province must include coverage that meets New York’s minimum liability requirements and pays New York no-fault benefits when an insured vehicle is used or operated in New York.⁵

New York’s no-fault statute also covers several cross-border situations directly.⁶

• A pedestrian or passenger hurt in New York through the use of a New York-insured car can receive no-fault benefits from that car’s policy, unless the person was in another motor vehicle or on a motorcycle.
• A New York named insured and household members receive no-fault benefits from their own policy when hurt by an insured vehicle outside New York, anywhere in the United States, its territories or Canada. Motorcycle occupants are excluded.

The serious injury threshold applies to lawsuits between “covered persons” for crashes in New York.⁷ That term includes owners, drivers and occupants of vehicles that carry the insurance New York law requires, pedestrians hurt by those vehicles, and anyone else entitled to New York no-fault benefits.⁷ Whether a visiting driver or passenger counts as a covered person can depend on their insurance, so it should be checked case by case.

Which coverage pays your medical bills

The answer depends on which state you live in, whose car you were in, and which companies insure the cars involved. Here are the main patterns the statutes address.

More than one row can fit the same crash, and the statutes do not answer every question about which policy pays first. Give prompt written notice to every insurer that may owe benefits. For New York no-fault, written notice is generally due within 30 days of the accident.

Which threshold applies to a pain and suffering claim

For crashes in New Jersey, the deemer statute generally puts out-of-state drivers whose insurers do business in New Jersey under the limitation on lawsuit threshold, as long as the defendant is eligible for New Jersey PIP.¹³

For crashes in New York, the serious injury threshold applies in lawsuits between covered persons.⁷

Beyond those rules, a court may have to decide which state’s law governs, especially when the people involved come from different states. That is the choice-of-law question.

How courts decide which state’s law applies

In New York

New York courts use the three rules from Neumeier v. Kuehner for laws that allocate losses after an accident, like limits on who can recover.⁸ In general, when the injured person and the defendant share a home state, that state’s law controls. When they come from different states, the law of the place of the accident usually applies, unless displacing it would advance the relevant laws’ purposes without harming the interstate system.⁸

In Edwards v. Erie Coach Lines Co., a bus carrying Ontario passengers crashed in New York. The Court of Appeals applied Ontario law to the claims against the Ontario bus company, because the passengers and the bus company shared an Ontario domicile. It applied New York law to the claims against the Pennsylvania companies.⁹ The same crash produced two different answers depending on who was being sued.

In New Jersey

New Jersey follows the Restatement (Second) of Conflict of Laws. In P.V. ex rel. T.V. v. Camp Jaycee, the New Jersey Supreme Court held that the law of the state where the injury occurred presumptively applies, unless another state has a more significant relationship to the parties and the event.¹⁰ In that case both parties were from New Jersey, but the injury happened in Pennsylvania, and the Court applied Pennsylvania law.¹⁰

Where to file, and which deadline applies

A lawsuit must be filed in a court that has authority over the person or company being sued. Usually that means the state where the crash happened, or the state where the defendant lives or is based. When both states are possible, the choice affects which deadline applies.

The basic injury deadline is two years in New Jersey and three years in New York.¹³ Two rules can shorten the time you have.

• Suing in New Jersey. New Jersey courts generally apply their own statute of limitations when it bars a claim.¹¹ Plan around the two-year deadline for any case that may be filed in New Jersey.
• Suing in New York over a crash outside New York. New York’s borrowing statute says a claim that arose outside New York cannot be brought after the deadline of either New York or the state where it arose. The exception is a claim that belongs to a New York resident, which gets New York’s deadline.¹² So a New Jersey resident hurt in New Jersey who sues in New York is generally held to New Jersey’s two years.

Why lawyers admitted in both states help

A lawyer may appear in a state’s courts only if admitted there, or with a court’s permission in a particular case. A cross-border claim may involve a New Jersey PIP carrier, a New York no-fault carrier, a lawsuit in one state’s courts and medical providers in both.

All three Parra Klein attorneys are admitted in New Jersey and New York. The firm has offices in Elmwood Park and Union City in New Jersey and in Manhattan, so the same lawyers can handle the no-fault claims, the deadlines and the lawsuit in whichever state they belong. The firm also serves clients in Spanish.