Information on Car Insurance in New Jersey
The state of New Jersey, unlike most jurisdictions, allows drivers to purchase two different types of automobile insurance policies to satisfy the mandatory minimum legal requirements. According to the New Jersey Department of Banking and Insurance, most drivers choose the standard policy. The basic policy is less expensive and is often purchased by younger drivers who have few assets to protect. The required coverages and policy limits are different for the standard policy and basic policy.
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Personal Injury Protection
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Personal injury protection, or PIP, pays the medical bills for you or those you include on your policy up to the coverage limit. With a standard policy, you may purchase as little as $15,000 or more than $250,000. You can only purchase a maximum of $15,000 in PIP with a basic policy. Regardless of the limit you select, both types of policies will pay up to $250,000 for significant or permanent injuries such as disfiguring, spinal cord or neurological injuries.
Property Damage
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The minimum coverage amount for both types of policies is $5,000 for each accident. With a standard policy, you can purchase additional coverage in excess of $100,000. With a basic policy, you cannot purchase additional coverage. This coverage pays for material damages to the car or property belonging to another, not for repairs to your own car.
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Bodily Injury Liability
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If you purchase a standard policy, it must provide at least $15,000 per person or $30,000 for all people who are injured in the same accident. You may purchase additional coverage up to $250,000 for injuries to one person or $500,000 for two or more people. Bodily injury liability is not mandatory with a basic policy, but you may purchase up to $10,000 for all people injured in the same accident as optional coverage. You are still liable for medical payments, however, and the other driver can sue you to recover his expenses. If he does, the insurance company will not provide you with a lawyer or pay your legal bills for your defense.
Protection from Uninsured and Underinsured Motorists
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Those who purchase a standard policy must purchase this coverage, which pays for bodily injuries or property damage if you are involved in an accident for which you are not at fault and the driver has no insurance or insufficient insurance. Your policy limits can be as much as your policy provides for liability insurance. Those who opt for a basic policy cannot purchase this type of coverage.
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References
- New Jersey Motor Vehicle Commission: Insurance Requirements
- State of New Jersey Department of Banking and insurance: Get Legal with New Jersey's Basic Auto Insurance Policy
- NJ Car Insurance: NJPIP Automotive Insurance New Jersey Coverages Overview
- Insure.com: Minimum Levels of Car Insurance You are Required to Buy
- Photo Credit Police officer at the scene of the Jeep and car road accident. image by Dragan Trifunovic from Fotolia.com
