New Jersey Basic Auto Policy - Who should consider buying the New Jersey Basic Auto Insurance Policy?

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.

Where can I purchase the New Jersey Basic Auto Insurance Policy?

Get Quotes here for a New Jersey BASIC AUTO POLICY. 

If you have a financed vehicle go HERE and SELECT BASIC POLICY

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.


Type of Coverage
Bodily Injury Liability
(Coverage for claims and lawsuits by people injured as a result of an accident you cause)
Coverage is not included but $10,000 coverage for all persons, per accident is available as an option
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)
Property Damage Liability
(Coverage for claims and lawsuits by people whose property is damaged as a result of an accident you cause)
Coverage of $5,000 per accident is provided
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)
Coverage of $15,000 per person, per accident and up to $250,000 for permanent or significant injury as defined in the 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 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)

None
Coverage is available up to amounts selected for liability coverage
Collision
(Coverage for damage to your
vehicle as the result of a collision with another car or other object)
None*
Available as an option
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.
None*
Available as an option
*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}



 

 

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