By Tanya Phillips

When it comes time to renew your car insurance policy, don’t just send in a renewal slip with your payment for the new policy period or fax your renewal to a different company to get a comparison quote for the same coverage. You need to take a look at the following five items on your policy and make decisions regarding your coverage based on you and your family’s needs:

1. There are three types of coverage: Liability, Collision, & Comprehensive

Liability coverage protects other people and their property if you cause an accident with your vehicle. Liability coverage is made up of both bodily injury and property damage. This coverage is mandatory and is necessary to operate a motor vehicle in New Jersey.

Collision coverage protects your vehicle if you hit other vehicles, non-moving objects or people. It will cover you regardless of who is at fault for the accident. If you are a victim of a hit and run, it is covered under collision.

Comprehensive covers you if you hit an animal or in the case of theft, vandalism, fire, and other weather-related issues. If you are driving and a rock hits your windshield and you need it replaced, it would be covered under comprehensive.

If your car is financed the lienholder will insist that you purchase a policy with full coverage with both collision and comprehensive. Comprehensive
and collision policies both have deductibles, which is the amount of money you will have to pay out of pocket when you file a claim before the insurance carrier will pay the difference to get your vehicle repaired. Typically deductibles are anywhere from $250 to $1,000. The amount of the out of pocket deductible can affect the cost of your policy, i.e. the higher the deductible, the cheaper the coverage.

A standard policy in New Jersey has liability limits as low as $15,000 per person and $30,000 per accident and as high as high as $250,000 per person and $500,000 per accident. You should discuss these limits with your insurance company or agent and determine which limits are better for you.

2. Medical Expense Coverage

Personal Injury Protection (PIP) pays medical expenses incurred by you or others covered by your policy who are injured in an accident. This portion of your policy pays medical expenses no matter who was at fault for the accident and is commonly referred to as “no-fault” coverage. In New Jersey, a standard policy can provide as little as $15,000 per person in PIP coverage or as much as $250,000. Most PIP provisions also have a copay and deductible. You can choose to make your health insurance primary for medical expenses which can reduce the cost of your automobile premium. However, if you do not have private health insurance and are involved in an accident, you will incur an increased deductible.

In addition to the PIP medical coverage, you can obtain PIP income continuation benefits, essential services, death benefits and funeral benefits. Income continuation benefits pay you for lost wages if you are unable to work due to accident-related injuries after you receive State Temporary Disability Benefits. Essential Services pay for such things as house cleaning and lawn services if you are unable to do them because of your injuries.

3. Uninsured Motorist Coverage and Underinsured Motorist Coverage

Uninsured motorist coverage (UM) provides bodily injury and property damage coverage to you if you are involved in an accident caused by a driver who is uninsured. Underinsured motorist coverage (UIM) provides bodily injury and property damage coverage to you if you are involved in an accident caused by a driver who is insured but has limits less than those of your underinsured motorist coverage. You can select the limits of your UM and UIM coverage but they cannot be greater than that of your liability coverage limits.

4. Limitation on Lawsuit Option v. No Limitation

When you purchase an auto policy you will be asked to select whether you want the Limitation on Lawsuit Option. If you select the No Limitation on Lawsuit Option you will have a right to bring a claim against the individual who caused the accident for pain and suffering for any injury you sustain as a result of the accident.

If you select the Limitation on Lawsuit Option, it will make the policy cheaper. However, you can only bring a claim against the individual who caused the accident for pain and suffering if your injury satisfies certain categories. Those categories are: death, dismemberment, loss of a fetus, significant disfigurement or scarring, a displaced fracture or a permanent injury that has not healed to function normally and will not heal to function normally with further medical treatment. Additionally, the permanent injury must be based on objective medical evidence. Choosing the Limitation on Lawsuit Option does not preclude you from bringing a claim for your economic damages such as wage loss or out of pocket medical expenses.

5. Who is covered by your policy?

You can exclude specific drivers in your household from operating certain vehicles on the policy for collision and comprehensive coverage purposes which can lower the cost of the policy. However, if that driver is involved in an accident in the vehicle in which they were excluded, you could be personally liable.

When completing insurance applications you should provide correct information including all individuals who live in the household. If you do not provide correct information, companies can deny coverage if you are involved in an accident.

You should review your coverage options every time your policy comes up for renewal. The cost of your auto policy will depend upon your choices. Be proactive and secure quotes from multiple companies to make the best coverage choice for you and your family.

If you have any questions as a result of this article or some other legal concerns, I encourage you to visit our website at or email me directly at or call 609-771-8611. I answer questions like this every single day.