New Jersey Basic Auto Policy
- Who should consider buying the New Jersey Basic Auto Insurance Policy?
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The Basic Auto Insurance New Jersey Policy
should be considered by those with few family responsibilities and few real
assets. It can provide a transition for younger
drivers who are just beginning work, providing a basic, minimum protection
when they may be least able to afford more comprehensive coverage.
If you do not have any liability coverage, you are responsible
for paying for the pain, suffering and other personal hardships and some
economic damages, such as lost wages, that you cause. The insurer
will not provide or pay for a lawyer to represent you if
you are sued. Your assets will be at risk, including the risk of having
money deducted from your wages if a judgment is entered against you. And,
if you lack coverage and someone hits you, you cannot sue.
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Where can I purchase the New Jersey Basic Auto Insurance Policy?
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New Jersey law exempts producers
from liability on account of selling a New Jersey Basic Auto Policy of insurance
with the minimum required coverage.
The chart below compares
the differences between the NJ Standard and NJ Basic Auto Insurance policies
and explains the amounts of coverage you may be able to purchase from an
insurer in New Jersey.
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Type of Coverage
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Bodily Injury Liability
(Coverage for claims and lawsuits by people injured
as a result of an accident you cause)
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Coverage is not included but $10,000 coverage
for all persons, per accident is available as an option
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Coverage of $15,000 per person, per accident
and $30,000 for all persons, per accident, is provided but
higher limits are available
(limits available may vary by company)
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Property Damage Liability
(Coverage for claims and lawsuits by people whose property
is damaged as a result of an accident you cause)
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Coverage of $5,000 per accident is provided
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Coverage of $5,000 per accident is provided but higher limits
are available
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Personal Injury
Protection
(Coverage for injuries sustained
in an automobile accident by you or other persons covered
under your policy)
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Coverage of $15,000 per person, per accident and up to $250,000
for permanent or significant injury as defined in the policy
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Coverage of $250,000 per person per accident unless a lower
limit is selected
However, up to $250,000 for permanent or significant injury
as defined in the policy regardless of selected limit
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Uninsured/Underinsured
Motorist Coverage
(Coverage pays for property
damage or bodily injury if you are in an accident caused by
an uninsured motorist (a driver who does not have the minimum
level of insurance required by law) or
a driver who is insured, but who has less
coverage than your underinsured motorist coverage)
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None
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Coverage is available up to amounts selected for liability
coverage
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Collision
(Coverage for damage to your
vehicle as the
result of a collision with another car or other object)
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None*
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Available as an option
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Comprehensive
Coverage for damage to your vehicle that is not a result
of a collision, such as theft of your car, vandalism, flooding,
fire or a broken windshield. Comprehensive coverage also
pays if you collide with an animal.
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None*
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Available as an option
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| *Collision and comprehensive
coverage are available as an option on policies issued through
PAIP or on voluntary policies issued by some
insurance companies. This is very important for anyone who has a vehicle
loan or lease that requires physical damage coverage. |
For drivers who may not currently have insurance, due to an inability
to afford standard coverage, the reforms authorized the creation of a new basic
auto insurance policy. This is a low-cost policy with minimum coverage that will
meet mandatory insurance requirements. It has a $15,000 personal injury protection
(PIP) medical expense limit, although treatment of certain extremely serious injuries
and costs for hospital care of other significant injuries is covered up to $250,000.
Other PIP benefits, such as income continuation and essential services,
are not
offered under the basic policy. Bodily injury liability coverage is also not included,
although $10,000 in coverage is available as an option at additional cost. The policy
provides a maximum property damage coverage of $5,000 and the "Limitation on Lawsuit
Threshold" is mandatory for the basic policy.
The State of New Jersey Basic Policy
was established pursuant to N.J.S.A. 39:6A-3.1 as a lower-cost alternative to standard coverage for drivers
for whom: a.) standard coverage may be cost prohibitive; b.) standard coverage limits
may be excessive given personal circumstances; or c.) driving uninsured in violation of N.J.S.A.
39:6A-3 may be contemplated as an alternative to standard coverage. To date, very few drivers
for whom the Basic Policy appears suitable have taken advantage of the option. The Department
is concerned that the negligible number of Basic Policies now in force (less than 0.22%
of all policies in force) indicates that many drivers who could consider the option have not done
so because they and producers lack accurate information. New Jersey has uninsured
drivers who by driving uninsured are putting themselves and others at substantial
risk. Drivers who elect the Basic Policy as an alternative to driving uninsured benefit
both themselves and the general public. The following provides accurate information about the
Basic Policy process for producers, applicants and prospective applicants.
1. Any owner of an automobile registered
or principally garaged in New Jersey may elect to meet minimum mandatory insurance
requirements with the New Jersey Basic Policy.
Owners of automobiles requiring collision coverage because of
lease or financing terms for the vehicle may elect to add those coverage's to the Basic Policy, with
all unaffected coverage's remaining as set forth in N.J.S.A. 39:6A-3.1, in cases where the
insurer offers such an option.
2. NJ Insurance Companies and
NJ Auto Insurance Agents in the voluntary
market are required by law to offer coverage, including but not limited to the Basic
Policy, to any eligible person who asks for coverage, except where the
Department has exempted the insurer from eligible-persons requirements, or if
the take all comers rule expiring would eliminate the applicant from coverage.
3. Drivers who elect the NJ Auto Insurance
Basic Policy as an alternative to driving uninsured gain several protections, as set forth in N.J.S.A.
39:6A-3.1, as well as a right to sue.
**Uninsured drivers do not have a right to sue for damages relating
to the operation of their vehicle.**
4. A properly completed and executed coverage
selection form, including all coverage's provided by the Basic Policy, is prima
facie evidence of the insured's knowing election or rejection of any coverage option.
5. N.J.S.A. 39:36A-23 immunizes insurers
from liability for damages relating to the levels of coverage elected or rejected by a driver
in a properly completed and executed coverage selection form. Furthermore, N.J.S.A.
17:28-1.9 specifically provides the same immunity for NJ Insurance Agents or producers.
6. All applicants and prospective applicants
must be informed of the existence and terms of the Basic Policy, and provided with the
opportunity to select the policy.
Claims information for New Jersey Insured's
What do you
get in NJ Basic and NJ Standard Auto Insurance Policies?
Bodily Injury Liability (Coverage for claims by people
injured as a result of an accident you cause)
NJ BASIC Car Insurance: Basic Policy: Coverage is not included
but $10,000 coverage for all persons, per accident, is available as an option.
NJ Car Insurance: Standard Policy: Coverage of $15,000 per person,
per accident and $30,000 for all persons, per accident, is provided but higher limits
are available.
Property Damage Liability (Coverage for claims by
people whose property is damaged as a result of an accident you cause)
NJ BASIC Car Insurance: Basic Policy: Coverage of $5,000 per accident is provided.
NJ Car Insurance: Standard Policy: Coverage of $5,000 per accident is provided
but higher limits are available.
Personal Injury Protection (Coverage for injuries
sustained in an automobile accident by you or other persons covered under your policy)
NJ BASIC Car Insurance: Basic Policy: Coverage of $15,000 per person, per accident,
and up to $250,000 for permanent or significant injury as defined in the policy.
NJ Car Insurance: Standard Policy: Coverage of $250,000 per person, per accident,
unless a lower limit is selected. However, up to $250,000 for permanent or significant
injury as defined in the policy regardless of selected limit.
Uninsured/Underinsured Motorist Coverage (Coverage
protects you if you are in an accident with someone who does not have the minimum
coverage required by law or is insured with limits less than your uninsured motorist
limits)
NJ BASIC Car Insurance: Basic Policy: None
NJ Car Insurance: Standard Policy: Coverage is available in amounts similar to
liability coverage.
Collision (Coverage for damage to your automobile
from striking another vehicle or fixed object)
NJ BASIC Car Insurance: Basic Policy: Available as an option in some cases
NJ Car Insurance: Standard Policy: Available as an option in some cases
Comprehensive (Coverage for damage to your automobile
caused by other than a collision)
NJ BASIC Car Insurance: Basic Policy: Available as an option in some cases
NJ Car Insurance: Standard Policy: Available as an option
Senator Joseph Kyrillos (R-13) has sponsored a bill,
that passed the Senate Commerce Committee, that would
require the NJ Motor Vehicle Commission (NJMVC) to
notify all motorists of the availability of low cost
BASIC POLICY. A policy created to help low-income
individuals meet the mandatory insurance requirement in
New Jersey.
“Drivers who
are likely to go uninsured because of limited financial
resources need to know that low-cost coverage is
available. “New Jersey's Working families, students and
recent college graduates, who commute to work or school
need to know that low cost car insurance is a viable
option.”
The bill would require motorists to be notified, in
writing, of the availability of these policies each time
they register or renew a registration for a vehicle. In
addition, appropriate posters would be posted in all
facilities and offices of the Motor Vehicle Commission.
“These programs could provide substantial savings for
many drivers if they only knew that these programs
existed. “A consistent problem in New Jersey has been
the relatively large number of uninsured drivers. As the
programs grow and become better known, we’ll see the
number of uninsured motorists decrease.”
The notices and posters would have to include a
notice that the Basic automobile insurance policy is
available at substantially less cost than the standard
automobile insurance policy; a statement indicating that
all insurers that provide motor vehicle insurance are
required to provide the Basic policy; and a notice that
the Basic policy contains lower limits of coverage than
the standard policy and the recommendation that drivers
ask their insurers or agents if the policy is the best
option for them, given their personal circumstances.
cite {From http://www.senatenj.com/index.php/kyrillos/drivers-should-be-aware-of-low-cost-auto-insurance/233}