If you live in New Jersey and own a car, state law requires you to carry certain types of insurance. Understanding New Jersey car insurance coverage requirements is crucial. Otherwise, you could be in trouble if you are stopped by police or are involved in an accident.
At Petro Cohen, we recognize that New Jersey car insurance requirements can be confusing. Please contact our office if you have questions about coverage and what New Jersey requires. In the meantime, read on to learn more about New Jersey car insurance coverage options.
No-Fault Insurance: Personal Injury Protection (PIP)
New Jersey is a no-fault insurance state. That means you must carry specific no-fault coverage that will apply if you get into an accident. It will help reimburse you for medical expenses and lost wages. It might also include funeral expenses should someone pass away.
No-fault insurance applies regardless of fault. You do not need to pursue a negligence claim against the at-fault driver. This coverage includes no reimbursement for your vehicle damage or fault-based damages, such as pain and suffering.
The minimum no-fault insurance, or Personal Injury Protection (PIP), is $15,000 per person or accident, but it could be as high as $250,000, depending on the policy you purchase.
Injured victims can sue the at-fault driver in certain situations. When an accident causes a severe injury, and the person has exhausted their no-fault benefits, they can pursue a personal injury claim to try and recover medical expenses incurred beyond their exhausted no-fault benefits.
New Jersey No-Fault Insurance Coverage is the best coverage you can have if you are in an automobile accident. Purchasing limits of $250,000 is recommended.
New Jersey Basic vs. Standard Policies
New Jersey offers something called a basic insurance policy that does not come with any liability coverage. That means if someone does sue you, you are on the hook personally for pain and suffering, and some type of economic damages. Your insurer will not provide a defense lawyer or help with any legal fees. There is an option to add up to $10,000 in liability for all persons, per accident. Property damage is only $5,000.
The standard policy reflects the current bodily injury limits of $25,000 per person and $50,000 per accident. Property damage is $25,000 per accident. You can purchase much higher bodily injury limits, even as much as $500,000.
Optional Auto Insurance Coverage
Some coverages are optional add-ons for the standard policy, and a couple are also available for the basic policy:
- Comprehensive coverage. Comprehensive coverage covers non-collision-related physical damage to your vehicle, such as theft, fire, or animal contact.
- Collision coverage. Collision covers damage from collisions with other vehicles or objects.
- Uninsured/Underinsured Motorist Coverage: UM/UIM can protect you if an at-fault party lacks insurance or sufficient liability limits. However, it is not an option for the basic policy. Whenever possible UM/UIM coverage should be purchased to protect you and your family if the person who causes your accident is uninsured or underinsured. You should make certain your UM/UIM coverage is the same as your liability limits.
You can also customize your standard policy with options like accident forgiveness, roadside assistance, new vehicle replacement, and rental car expense coverage for more comprehensive protection.
Factors Affecting Car Insurance Rates
Your zip code and vehicle type have an impact on your insurance rates. Age and driving experience are other factors impacting your rates.
Do you have a teenager at home? If so, they can apply for a learner’s permit at 16, their probationary license at 17, and a full driver’s license when they turn 18. Having a younger driver can drive up your insurance rates. Thankfully, you can usually find out how much insurance costs will rise before adding them to your policy, so it does not come as a huge shock.
Be aware of other factors that can increase your rate, such as traffic violations, prior at-fault accidents, adding a driver to your policy, and any lapse in insurance coverage.
What Are the Consequences of Driving Without Insurance?
Driving without meeting New Jersey car insurance requirements lead to fines, license suspension, vehicle impoundment, and high out-of-pocket costs in case of accidents. It also increases your insurance premium when you decide to get coverage again.
Choosing the Right Policy
When selecting an auto insurance policy in New Jersey, shopping around is essential. Before purchasing a policy, consider the following:
- Assess your needs. Consider the coverage you need based on your vehicle, driving habits, and financial circumstances.
- Compare providers. Research and compare insurance providers’ coverage options, customer service, and rates.
- Read the fine print. Pay attention to the policy details, including exclusions and limits, so you know what is covered and what is not.
Choosing the right auto insurance coverage is crucial. You should purchase as much insurance as possible, especially if you have assets. Trying to save money by buying a basic policy could be devastating if you cause a severe accident. At Petro Cohen PC we can explain auto insurance coverage so that you can purchase the right coverage for you and your family.