Threshold Level
What Does Threshold Level Mean?
The threshold level refers to the minimum amount of money or severity of bodily injury that must be reached as a result of an accident before a policyholder with no-fault car insurance can file a lawsuit against another party.
Insuranceopedia Explains Threshold Level
There are two types of threshold levels to consider: monetary and verbal.
The monetary threshold refers to the medical bills incurred from a car accident that typically exceed the financial coverage provided by the insurance policy.
The verbal threshold, on the other hand, pertains to the extent of bodily injury caused by the accident, which may include dismemberment or death.
In both cases, the financial excess or severity of the injury can serve as a basis for legal action. If the damages fall below the threshold, it may prevent a person from filing a lawsuit.
The threshold level varies by state because insurance laws in the United States are governed by state law rather than federal law.
