Posted June 5, 2012
Charmayne Smith, Researcher
NJ Car Insurance
New Jersey is a “no-fault” state with coverages that are slightly different from other states. NJ car insurance laws mandate drivers to carry personal injury protection (PIP) and property damage liability (PDL) coverages. NJ car insurance requirements also require drivers to choose between standard and basic policies. These NJ car insurance selections not only affect the policy premium but the rights and amount of protection provided to the policyholder.
NJ Car Insurance: PIP
PIP coverage insures the NJ car insurance policyholder, their passengers and household members against injuries incurred during an accident. As a “no-fault” NJ car insurance coverage, PIP insures these individuals regardless fault. This NJ car insurance coverage reimburses the cost of medical treatment, rehabilitation costs and lost wages. NJ car insurance laws require drivers to carry at least $5,000 in PIP coverage but policyholders can elect as much as $100,000 in protection.
NJ Car Insurance: PDL
PDL is an “at-fault” NJ car insurance coverage that reimburses the other party for damages caused during an accident. This NJ car insurance coverage only pays the other party when the policyholder is deemed at fault for the accident. $5,000 is the minimum PDL coverage permitted by NJ car insurance law; however, drivers can select as much as $100,000 in protection.
NJ Car Insurance: PIP Additional Options
NJ car insurance laws provide drivers with the option for additional PIP protection. NJ car insurance policyholders can elect:
- Income Continuation – Reimburses lost wages if you are disabled by the accident
- Essential Services – Reimburses the cost of hiring another party to complete things you cannot do for you since a covered accident, such as laundry, housekeeping, etc.
- Death Benefits – pays the family or estate any remaining benefits under the income continuation and essential services coverages, in case of death
- Funeral Expense Benefit – Reimburses the cost of reasonable funeral expenses resulting from a covered accident
NJ Car Insurance: Standard Deductible
Though not required, NJ car insurance coverage options include bodily injury liability (BIL), uninsured and underinsured motorist coverages (UM/UIM), as well as comprehensive and collision coverage, known as physical damage coverages. NJ car insurance laws permit bodily injury liability limits as high as $250,000 per person with $500,000 per accident and these NJ car insurance liability coverages can be combined into a single limit for maximum protection. The standard NJ car insurance deductible for comprehensive and collision coverage is $750, though additional deductibles are available.
NJ Car Insurance: Standard vs Basic
NJ car insurance laws require policyholders to choose between standard and basic policies. The standard NJ car insurance policy includes PIP and PDL coverage, as well as the options for additional liability and physical damage protections. Drivers that select the standard NJ car insurance policy must carry UM/UIM coverage. The basic NJ car insurance policy only includes PIP and PDL protection and these NJ car insurance coverages are only offered at state minimum limits. Some NJ car insurance carriers permit drivers to add physical damage coverages to the basic NJ car insurance policy. However, this option is not available with all NJ car insurance providers.
NJ Car Insurance: Special Policy for Medicaid Recipients
To ensure that Medicaid recipients are able to meet NJ car insurance requirements, NJ offers a special NJ car insurance policy for Medicaid recipients. This special NJ car insurance policy offers eligible Medicaid recipients limited NJ car insurance coverage for $365 a year. Qualified applicants must speak with their NJ car insurance carrier or agent for assistance in securing this policy.
NJ Car Insurance: Unlimited vs Limited
NJ car insurance laws require drivers to choose whether or not they want to maintain an unlimited right to sue other parties for pain and suffering resulting from an accident. The NJ car insurance No Limitation on Lawsuit Option provides policyholders full rights to sue. The NJ car insurance Limited Right to Sue Option only permits NJ car insurance policyholders the right to sue for pain and suffering when the litigant has sustained permanent injury. NJ car insurance laws define permanent injury as:
- The loss of a body part
- Significant disfigurement or scarring
- A displaced fracture
- Loss of a child or fetus
- Loss of an organ or body part which will not heal or function properly after the accident
NJ Car Insurance: Named Driver Exclusion
NJ car insurance policyholders can exclude household members from their policies. To do so, policyholders must sign a Named Driver Exclusion form and submit it to their NJ car insurance carrier. This NJ car insurance exclusion excludes drivers from the physical damage portion of the NJ car insurance policy which also reduces the NJ car insurance policy premium.
NJ Car Insurance: Rights
NJ car insurance laws require drivers to maintain a NJ car insurance policy. Still, NJ car insurance laws provide drivers with certain rights.
- Drivers have the right to cancel their NJ car insurance policy at any time during the policy period.
- Drivers have the right to inquire about or change their NJ car insurance policy coverages at any time.
- NJ car insurance policyholders have a right to a timely response from their NJ car insurance carrier or agent.
- Policyholders have a right to fair and prompt handling of their NJ car insurance claim.
- NJ car insurance carriers must provide policyholders with at least a 15-day warning before cancelling the NJ car insurance policy.
- Policyholders have a right to appeal any action taken by their NJ car insurance carrier.
- NJ carriers must provide policyholders with at least a 60-day notice before non-renewing a NJ car insurance policy.