Only slight, rudimentary coverage for auto insurance is provided by the NJ Basic Car Insurance Policy. The limits are low on the two coverages included here, which are both standard. What are they?
- Personal injury protection (up to $250,000 for severe injuries but ordinarily $15,000 per accident, per person)
- Property damage liability of $5000 per accident
There is no underinsured or uninsured motorist coverage included in the Basic Policy. Many individuals prefer purchasing collision and comprehensive coverage, as well as some bodily injury liability coverage.
Where Are You Vulnerable?
With such low coverage limits and so few protections, drivers are frequently left vulnerable by the Basic Auto Insurance Policy. Here are some areas in which drivers end up being at risk or defenseless:
- If you cause an accident, you may not have any coverage for your vehicle without collision and comprehensive coverage
- If another driver causes an accident and isn’t adequately insured, you may not have enough coverage
- If sustained injuries by others exceed the $15,000 in medical treatment but don’t qualify for the personal injury protection limit of $250,000
- You may not be protected for injuries that passengers of others, or others themselves, sustain if another is responsible for the accident with no added liability coverage for bodily injury
- If $5000 in property damages is exceeded in an accident involving another vehicle
There are even more problems than the limits and coverages where the Basic Policy shortfalls are concerned. You must agree to a “Limited Right to Sue” option when you purchase a Basic Policy. What does that mean? Against other drivers, a personal injury suit for “suffering and pain” cannot be filed because you have foregone that right. There are exceptions to this rule, however, which involve the following:
- Death
- The loss of a fetus
- A permanent injury
- A displaced fracture
- Significant disfigurement
- Significant scarring
- The loss of a body part
The no-fault personal injury protection of the other driver will have to be enough to cover injuries if they are minor.
A Warning Is Issued
How problematic is the fact that the Basic Auto Insurance Policy leaves drivers so vulnerable? Warnings regarding the policy have been issued by New Jersey’s Department of Banking and Insurance because drivers are left so exposed and helpless by the policy.
In fact, the Department of Banking and Insurance website actually states that only people with very few real assets and those with little family responsibility should consider limiting themselves to “The Basic Policy”.
You have to ask yourself the following questions if you’re considering limiting your insurance coverage in this manner: “Can I afford to have so little protection? Should I consider additional coverage to make sure that assets, significant financial responsibilities, and more are covered?”
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