The Garden State mandates that all motorists are financially responsible for injuries and damages that result from traffic accidents and while this may be the case in just about every state, New Jersey’s drivers have to put in some careful thought when purchasing a car insurance policy to satisfy this requirement. This is because the state allows resident motorists to abide by this law in two different ways by choosing one of two types of policies available in the state. A motorist may choose to either purchase a basic or standard policy and the protection that each provides is significantly different.
Prior to purchasing automobile coverage, residents should take the time to fully understand what options that they have to choose from in order to determine which type of policy will best suit their needs. Basic policies provide much less coverage than standard policies and also limit an insured to the options they have to obtaining additional protection. The state advises that a basic policy is not for everyone and suggests carefully evaluating circumstances prior to making a decision. Consumers may be tempted to buy “basic” New Jersey auto insurance because it is cheaper than “standard” and does satisfy the state’s law, but it can leave a motorist underinsured.
A basic NJ car insurance policy provides only the absolute minimum allowed by the state in order to legally satisfy the requirement of the state. This includes $5,000 for property damage liability, $15,000 in personal injury protection (PIP) per accident (up to $250,000 for certain injuries.) and the option to purchase bodily injury liability at a maximum limit of $10,000. A major setback of these policies is that uninsured and uninsured motorist is not available to policyholders and only certain insured that sell basic policies will offer physical damage protection (comprehensive and collision.) The state only recommends that individuals with few family responsibilities and assets to protect consider this coverage.
Standard policies are the most common choice among NJ’s motorists and with good reason; it can provide much more protection and many more coverage options. A standard policy comes with bodily injury limits of $15,000 per person and $30,000 per accident with the option to go as high as $250,000 and $500,000 respectively. It as comes with $5,000 in property damage liability of $5,000 which can be raised to more than $100,000, depending on the insurer. The minimum limit of PIP is the same at $15,000 but can be raised to over $250,000 and policyholders can also purchased uninsured and underinsured motorist coverage matching their liability limits. In addition, comprehensive and collision coverage is also available by the carrier chosen. One can see why it may be a wiser choice to go with standard policies rather than basic. To make a more educated decision, consumer may want to refer to the New Jersey Auto Insurance Shopping Guide for more information.
Source: http://www.onlineautoinsurance.com/new-jersey/
