What are My Rights as a Car Insurance Policyholder in New Jersey?

Posted on behalf of James Lynch on July 29, 2021  in Car Accident News. Updated on May 25, 2023

The rights of car insurance policyholders in states like New Jersey are especially important due to the state’s no-fault laws. This is because crash victims must first file their injury claims with their own insurance companies instead of through an at-fault driver’s liability policy.

Since injury victims will be dealing with their own insurance company first, it is important to understand what your rights are throughout the process.

Our car crash attorneys in New Jersey are prepared to help you through the process of filing a claim and help you understand what your rights are as a car insurance policyholder under state law.


The insurance company is required to acknowledge they received your claim within 10 business days of the date you filed it. The only exception to the rule is if they paid the claim within that time, which is highly unlikely.

Once the insurer receives your claim, they must provide you with the necessary forms and clear instructions on filling them out. If the instructions are unclear, or you need assistance with anything, the insurance company is also required to provide reasonable assistance within 10 business days after receiving your request for help.


When you file a first-party claim, your insurance company is required to investigate your claim fairly and in a prompt manner. Generally, the insurance company has 30 calendar days to pay out a claim unless they provide adequate reasoning and provide at least 45 days prior notice as to why the claim is not being paid.

Remember that no-fault insurance, otherwise known as Personal Injury Protection (PIP), is meant to accelerate the process of injury claims so victims can have their medical treatment paid for no matter who is at fault for an accident.


If the insurance company decides your claim is invalid for whatever reason, they are required to provide a denial letter to you stating their reasoning. Under legal precedent, the letter must not be ambiguous or open to multiple interpretations in its reasoning for your denied claim. In fact, when denying a claim, New Jersey law states that insurance companies should provide a specific reference to a policy and a written statement of facts explaining why your claim was denied.

If the insurance company follows these requirement procedures, but you disagree with their reasoning, you still have the right to appeal the denied claim through the insurer’s internal appeals process.

The Internal Appeal Rule (IAP) states that insurers shall have a one-level appeal procedure for each appealed issue before making a request for an Alternative Dispute Resolution (ADR).

This means that you may file only one appeal for the insurer to review your claim to see if the decision to deny it may be repealed. If the insurer’s decision to deny your claim remains unchanged, then you may be able to attempt to resolve the dispute through arbitration or mediation, depending on the wording of your policy.


Most insurance policies have language written in them that prevents the policyholder from filing a lawsuit against the insurance company. That is why any disputes about denied first-party claims must be resolved through arbitration.

However, the laws are different when it comes to third-party claims. New Jersey drivers have the option to choose between two different insurance policies, one of which provides the choice between the limited or unlimited right to sue an at-fault driver for damages after an accident.

If you are a driver who chose the limited right to sue option under your standard insurance policy, then you likely had a lower premium, but have a higher threshold for when to file a lawsuit against a negligent driver. With the limited right to sue, you may only file a lawsuit if:

  • Your accident involved a fatality
  • You suffered a permanent injury
  • You suffered the loss of a body part
  • You were disfigured
  • You suffered significant scarring
  • You suffered the loss of an unborn baby


You have certain rights under New Jersey law when you purchase a car insurance policy. Unfortunately, not many people are aware of those rights when they are involved in an accident. The insurance companies bet on that fact so they may deny or devalue your claim to protect their bottom line.

Let our knowledgeable attorneys stand up for your rights if you are injured in an accident caused by someone else’s negligence.

We offer a free consultation to discuss your claim and do not get paid unless you do.

Call us today at (800) 518-0508

* Results may vary depending on your particular facts and legal circumstances.

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