Automobile Insurance Requirements for New Jersey
The state of New Jersey requires all vehicles registered in the state to have insurance. Each vehicle must have a minimum level of coverage, but residents have the option of purchasing higher coverage limits or additional types of insurance, such as collision, comprehensive, rental car payments or funeral costs. Remember that each policy is different, and costs will vary according to a number of factors, including the provider, your driving record and your place of residence within the state.
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Standard vs. Basic Policies
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New Jersey offers two types of automobile insurance policies: standard and basic. According to the New Jersey Department of Banking and Insurance, most New Jersey residents choose the standard policy, as it meets the minimum coverage requirements and allows for the purchase of additional protection, such as comprehensive, collision and rental car coverage. A basic policy is less expensive, but it only provides enough coverage to meet state minimums. Many younger drivers who have fewer assets or limited family responsibilities opt for basic policies.
Liability Insurance
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New Jersey law requires liability insurance, which pays for damages you cause in an accident or for your defense if you are sued for damages you cause. Liability coverage breaks down into two parts: bodily injury liability coverage and property damage liability coverage. As of 2010, with a standard insurance policy you must carry $5,000 of coverage for damage to property, $15,000 coverage for death or injury to one person and $30,000 coverage for death or injury to more than one person. A basic policy offers a minimum of $5,000 for property damage. Coverage for injury or death to more than one person is an option under the basic plan, with a minimum amount of $10,000.
Personal Injury Protection (PIP)
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New Jersey also requires motorists to carry personal injury protection coverage, also known as no-fault coverage. This coverage makes medical payments for you and anyone covered by your policy if you sustain an injury in an accident, whether or not you were at fault. Standard policies must provide a minimum coverage amount of $15,000. PIP covers payments to doctors and hospitals, as well as other medical providers; it also provides reimbursement for expenses related to your injury, such as lost wages.
Uninsured Motorist Coverage
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If you have an accident with someone who does not have insurance coverage, uninsured motorist coverage protects a minimum $15,000 worth of your assets.
Other Insurance Regulations
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When you purchase an auto insurance policy in New Jersey, you will receive a New Jersey Insurance Identification Card. You must carry this card in your vehicle at all times. You must present your insurance card when stopped for a traffic violation, in an accident and before you have your car inspected. Failure to carry adequate insurance coverage carries a $300 fine for the first offense, plus community service and a possible one-year license suspension. For a second offense, the penalty rises to a $500 fine plus 14 days in jail, community service and a two-year license suspension.
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