When you buy auto insurance in New Jersey, you do not buy insurance because you want to, but rather because you have to because it is required by law. Very often, when buying insurance, people simply opt for the cheapest coverage. One thing that is crystal clear is that insurance coverage in New Jersey is not a “one size fits all” process. Generally, the consumer does not have an understanding of what he is buying when purchasing insurance. Frequently, I have prospective clients who consult with me in regard to an auto accident in which they were injured through no fault of their own. It is at this time that their coverage becomes relevant to a potential claim and oftentimes they realize that they are underinsured.
Initially, New Jersey is a No Fault State which means that regardless of fault, any medical bills arising from the accident are paid by one’s own insurance company. This type of coverage is known as Personal Injury Protection (PIP). Recently, I have seen an increase in the number of policies written with PIP coverage sold by many of the large insurers in the State of New Jersey with the minimum limit of $15,000. This amount is wholly inadequate given that any type of serious injury that requires medical treatment and potentially surgery, would quickly exhaust the available $15,000 in coverage. In other words you may need medical treatment but are unable to afford it because of inadequate coverage. My recommendation to anyone buying auto insurance in New Jersey, is not to purchase PIP limits in the amount of $15,000 unless you absolutely do not have the money to buy higher coverage. I recommend coverage in the amount of $250,000. In fact, $250,000 in PIP coverage may only cost approximately $50 more in premiums over a six month policy period. Therefore, if you can afford the additional $50, I would strongly recommend that you purchase a policy with PIP coverage in the amount of $250,000.
In regard to liability coverage, meaning if you cause an auto accident which injures someone, you should have limits that take into consideration the amount of your net worth. New Jersey law requires minimum coverage of $15,000 per person/$30,000 per accident in liability insurance. If someone has no assets and has a minimum wage job, under those circumstances more than $15,000/$30,000 in coverage may not be necessary. However, if you have assets and make a good living, then the liability coverage should be increased so as to avoid the risk of catastrophic financial consequences in the event that you caused an accident that resulted in significant injury to another.
Moreover, you will also have to make a choice of coverage for uninsured/underinsured motorist (UM/UIM) coverage. What this means is that you may buy insurance from your own insurance carrier that will provide additional coverage for you in the event that someone who causes you an injury has minimal insurance coverage. Buying this type of insurance is money well spent. Oftentimes I meet with clients who are involved in an accident with another driver who was at fault but only has a minimum policy. Under those circumstance, if their injury is a serious permanent injury exceeding the other driver’s policy of $15,000, then a claim may be made under one’s own policy under the UM/UIM provision. If you do not have adequate UM/UIM coverage then you would be left with trying to recover your damages from the person who caused the accident who has no assets, minimal coverage and limited income.
Although there are other things to consider when purchasing New Jersey auto insurance, the three most consequential areas of concern are liability, PIP and UM/UIM coverages. Whenever you can afford it, it is best to purchase (1) an adequate amount of liability insurance given your financial situation, (2) $250,000 Personal Injury Protection (PIP) coverage and (3) an increased amount of UM/UIM coverage. The increased coverage in these three specific areas will serve to protect you and benefit you significantly in the event of an auto accident. Remember to always shop around when buying auto insurance. Some insurance companies are more competitive in pricing then others.
If you have been the victim of the negligence of another in an automobile accident, please contact my office as quickly as possible following the subject accident. It is important to consult with us early on so that we may begin the process of fighting for your rights in regard to any potential claim that you may have. The process is complicated and requires the expertise of a qualified New Jersey personal injury attorney.