NJ Auto Insurance Options
When New Jersey drivers go to their local agent and/or go online to purchase car insurance, the options can be confusing and balancing the amount of coverage and options and paying for those options can often lead to poor decisions being made. Many times a small increase in a insurance premium will provide much better coverage. Let’s review some of those options.
The first decision that needs to be made is whether you want to select the “limitation on lawsuit” also known as the “verbal threshold”. Selecting the “limitation on lawsuit” or “verbal threshold” will limit your right to sue another individual unless you have sustained a permanent injury based on objective evidence. What constitutes a “permanent injury” is defined by statute and case law. It isn’t simple to explain and beyond the scope of this article. In summary, the “limitation on lawsuit” and “verbal threshold” makes it harder for you to collect compensation for the negligence of another driver even if they were clearly negligent in how they drove. An example that illustrates the point is a person who rear ends you while you are stopped at a light. That driver is clearly negligent since they should have stopped and not collided with a car stopped at a traffic light. But if you selected the “limitation on lawsuit” also known as the “verbal threshold” option, you would have to prove that your injury was a “permanent injury”. So even if you injured your neck and had treatment with a doctor, it could be determined that your injury was not a “permanent injury” and your case could be dismissed by a Judge or if a Judge allows the matter to proceed to a Jury Trial, a Jury could find after a trial that the injury was not a “permanent injury” resulting in no compensation for your injuries. Thus, it’s important to ask your Insurance agent on the cost of a policy that does not have the limitation or the “No Limitation On Lawsuit” option.
Whatever option you select, that option will apply to family members who reside in your household which include your spouse and children and in some circumstances other family members who reside in your house or apartment.
There are some exception to the general rule. For example, if a commercial vehicle collides with your vehicle, the “lawsuit threshold” does not apply even if you selected that option.
Selecting the “No Limitation on Lawsuit” threshold option will all you to recover compensation from negligent drivers including pain and suffering without any limitation. It allows you to receive compensation if you are injured no matter the severity of that injury.
We recommend the following course of action. Ask your agent or make different selections online with various insurance carriers to determine the price difference between the “Limitation on Lawsuit” option also know as the “Verbal Threshold” and the “No Limitation on Lawsuit” option to determine if you can afford the “No Limitation on Lawsuit” option to protect your right to sue without an limitation if you are injured by a negligent driver. It may make a big difference in your life and that of your family if you have no limitation to sue.
New Jersey law requires all drivers to purchase automobile insurance. There is a “Basic Policy” which provides almost no coverage and we recommend not considering this policy. There is a “Standard Policy” which provides coverage for negligence starting at $15,000 and going up to $1,000,000.
There are six coverages that can be selected.
- “Bodily Injury Liability”. Coverage for claims and lawsuits by people injured as a result of an auto accident you cause. The coverage starts at $15,000 but we recommend you get a price quote for a higher limit because it will protect your assets if you cause an accident. It will also give you additional insurance coverage under the policy’s “UnderInsured” or “Uninsured Coverage” (described below). There are limits of $25,000, $100,000 per person and $250,000 per person which will provide much better protection than a $15,000 policy.
- “Property Damage Liability”. Coverage for claims and lawsuits by people whose property is damaged as a result of an auto accident you cause. There are limits of $5000 up to $100,000.
- “Personal Injury Protection”. Coverage for injuries sustained in an automobile accident by you or other persons covered under your policy which include immediate family members who reside with you. There are limits starting at $15,000 and going up $1,000,000 with special policies. Normally it is recommended that the $250,000 policy be selected to provide sufficient medical bill coverage if injured in an automobile accident. There are also coverage of $250,000 no matter what policy limit is selected initially that will provide coverage of $250,000 in injuries that involve the following: permanent or significant brain injury, spinal cord injury or disfigurement or for medically necessary treatment of other permanent or significant injuries rendered at a trauma center or acute care hospital immediately following an accident and until the patient is stable, no longer requires critical care and can be transferred to another facility in the judgment of the physician.
- “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 and your damages are greater) or a driver who is insured, but who has selected a policy limit less than your policy limits and you have damages that exceed that person’s policy limit. This coverage protects you in cases for example: A driver does not have automobile insurance or it was canceled properly by the insurance carrier at the time of your accident. A driver has insurance for example $15,000 but causes serious personal injuries that far exceed the $15,000 policy limit. You can seek payment for those injuries from your automobile insurance company. The policy limit selected on “Body Injury Liability” determines how much “Uninsured/Underinsured Motorist Coverage” you can obtain. The limits on this coverage should be the same as the “Body Injury Liability” because the cost is not much more for additional coverage after the “Body Injury Liability” amount is selected. Ask your agent for the cost of the additional coverage and decide on what you can afford but understand if there is an accident your choices matter and may be life changing.
- “Collision Coverage” for damage to your vehicle as the result of a collision with another car or other object. If your car is financed or leased this coverage is usually required to ensure that the vehicle is repaired, if it is involved in an accident.
- “Comprehensive Coverage” 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.
We hope that the above information has been helpful. Print this out and bring it to your insurance agent and request that he or she provide different quotes with “Verbal Threshold” versus “No Limitation Threshold” and higher limits of “Bodily Injury Liability” and “Underinsured/Uninsured Coverage”. A higher limit on your “Personal Injury Protection” coverage will benefit you in the payment of medical bills.