Legal Guide

New Jersey's Auto Insurance Reform

Frequently asked questions about car insurance in New Jersey.

by: Steve Blader, Esq.

Q. The new basic policy sounds pretty appealing. Is it as good as it sounds?

A. Absolutely not. This type of policy was invented under the theory that one way to reduce high insurance rates would be through policies that offer minimal coverage. But you get what you pay for. The so-called basic policy is so lacking in protection that it provides you with little more than an insurance card.

Q. How can the state allow such inadequate policies?

Q. I have no assets to speak of, so why should I worry about being sued?

A. Unpaid judgments stay on the books for 20 years. So the assets you may gather during the next two decades could be taken away. And while the judgment against you is outstanding, you can't own a car, and aren't allowed to drive. Keep this in mind also when you are insuring teens or college-age drivers.

Q. Is it true that under the new law I won't be able to go to my own doctor if I am injured?

A. You may have the ability to select your own doctor under your personal injury protection (PIP) coverage. Don't give up that right by purchasing policies that offer to save you money if you choose "pre-certification." You'll be turning over control of your treatment to your insurance company.

Q. What can I do to protect myself from other drivers that aren't insured or who have little coverage?

A. That question becomes even more important as more drivers opt for basic coverage. You need to buy more than the minimal amount offered of uninsured/underinsured (UI/UIM) coverage. We recommend that you get at least $100,000 of this coverage. These are potential payments that your insurance company makes to you if the other driver is at fault in an accident but lacks enough coverage to take care of your needs.

Q. What kind of protection can I get in case an accident is my fault?

A. That's where liability coverage comes in. It protects your assets if you are charged with causing an accident. You should get at least $100,000 bodily injury liability coverage. There's another reason to get high liability coverage -- your insurance company won't sell you uninsured/underinsured motorist coverage in amounts higher than your liability coverage. So liability coverage is important, no matter who causes the accident.

Q. Should I save money and give up my right to sue?

A. No. If you choose the "limitation on lawsuit threshold" option, and you are hurt in a car accident, you won't be allowed to make a claim for most injuries unless they are permanent. It won't matter how much those injuries are affecting your income or the quality of your life. That's a big risk to take, especially when you don't have to.

Szaferman, Lakind, Blumstein, & Blader, P.C.
Committed to Excellence