Written by New Jersey Basic Auto Insurance Policy
Q: I live in New Jersey and I heard about the NJ Basic Auto Insurance Policy. What is it?
AIS Answer: In the State of New Jersey it is illegal to drive without auto insurance and New Jersey, like many states understands that auto insurance can be very expensive so it has a policy that was designed to help NJ residents that need less liability coverage than others that have more possessions and much larger risk.
New Jersey Basic Auto Insurance Policy:
Comprehensive and Collision often makes up the bulk of a car insurance premium, and those with less of a need for the added coverage, or younger drivers that cannot otherwise afford high cost coverages, may opt to purchase just the “basic auto insurance” needed to conform to New Jersey insurance laws.
This policy may not be ideal for people that have a family to take care of, or have many assets. Why? Because when you opt for a basic auto insurance policy through New Jersey you’re putting all of your assets and wages at risk of a lawsuit from an accident because you’re declining to carry Bodily Injury Liability insurance. For more information on what coverages you’ll keep and decline read below.
Basic Auto Insurance Policy Coverages:
Bodily Injury Liability: NONE
Provides: Protection up the amount specified (i.e. $10k) for any costs related to a injured people in an at-fault accident. With the basic auto insurance policy you decline this coverage.
Property Damage Liability: $5,000
This provides protection (up to $5,000 in this case) for damage you have caused to other people’s property. With the basic auto insurance policy you’re minimum coverage is at $5,000.
Personal Injury Protection: $15,000/$250,000
Personal Injury Protection (also known as PIP) covers you and any occupants of your vehicle in the event of an accident. With the basic auto insurance policy you have coverages of $15,000 for a single person up to $250,000 for a everyone involved (the policy defines what constitutes a larger payout).
Uninsured and Underinsured Motorist: NONE
Coverage that pays for property damage or bodily injury if an Uninsured or Underinsured driver causes an accident. With the basic auto insurance policy there is no coverage for this.
Collision: NONE*
Collision covers damage to your vehicle in the event of a collision with another car or object. With the basic auto insurance policy there is no coverage, however, under policies issued by PAIP it is an option. If you have a vehicle loan you are required to carry Comprehensive and Collision coverage.
Comprehensive: NONE*
Comprehensive covers vehicle damage unrelated to an accident. This includes theft, vandalism, flooding, and other acts of nature where there is no at fault driver. With the basic auto insurance policy there is no comprehensive coverage, however, under policies issued by PAIP it is an option. If you have a vehicle loan you are required to carry Comprehensive and Collision coverage.
Purchasing a Basic Auto Insurance Policy
Like all insurance changes you must speak to a licensed insurance agent or insurance company. They will be able to answer all of your questions regarding New Jerseys Basic Auto Insurance Policy and can give you the best advice. You can also contact the New Jersey Department of Insurance for information and assistance in acquiring this insurance policy.
more states need to have a basic auto insurance policy. What about california, wyoming, nevada…all those states need some form of basic car insurance plan.