Auto insurance is mandatory in New Jersey , but the type and cost of that coverage can vary significantly. Every day, consumers are finding that there are options available to make it easier to comply with the law. The Automobile Insurance Cost Reduction Act mandated that a Basic Policy be available to all drivers.
It is important to realize that you are breaking the law if you drive uninsured. The penalties for driving uninsured are getting more severe — in addition to risking economic loss by not having insurance protection, you risk fines, suspension of driver's license or registration and even time in jail. In the future, your car could be impounded if you are caught behind the wheel without coverage.
Below we will review the Basic Policy. The Basic Policy offers less protection, but at a lower cost than the Standard Auto Insurance Policy.
More resources Find a PAIP producer (or call 1-800-652-2471 ) Auto Insurance Purchasing Planner (interactive guide to buying a policy)
The Basic Policy should be considered by those with few family responsibilities and few real assets. It can provide a transition for younger drivers who are just beginning work, providing a basic, minimum protection when they may be least able to afford more comprehensive coverage.
If you do not have any liability coverage, you are responsible for paying for the pain, suffering and other personal hardships and some economic damages, such as lost wages, that you cause. The insurer will not provide or pay for a lawyer to represent you if you are sued. Your assets will be at risk, including the risk of having money deducted from your wages if a judgment is entered against you. And, if you lack coverage and someone hits you, you cannot sue.
The chart below compares the differences between the Standard and Basic policies and explains the amounts of coverage you may be able to purchase from an insurer.
As high as: $250,000 or more
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) or a driver who is insured, but who has less coverage than your underinsured motorist coverage
The Basic Policy includes the Limited Right to Sue option (Limitation on Lawsuit option).
If you have any questions about the Basic Policy your agent, insurance company or DOBI can assist you. If you have any problem purchasing the basic policy please contact DOBI immediately.