New Jersey Auto Insurance Quotes and
Coverage Guide
New Jersey Motor Vehicle Insurance
Questions & AnswersQ: Is
auto insurance mandatory?
A: Yes. With the highest population density
of any other state in the nation, auto insurance is
mandatory in the Garden State because it only stands
to reason people here are going to run into each
other. New Jersey insurance laws were designed to
protect the careful and conscientious from those
garden-variety goobers who aren't.
Q: Is New Jersey a "no-fault" or a “tort” state?
A: Both. The system in New Jersey is what is
known as “choice no-fault.” In New Jersey, drivers
may select one of two options: a no-fault auto
insurance policy, with a verbal threshold or a
traditional tort liability policy. The verbal
threshold applies to both the Basic liability policy
and Standard policy in which the policyholder
chooses no-fault coverage. The Basic policy contains
lower amounts of coverage. For more information
about the fascinating world of New Jersey auto
insurance, you can visit http://www.state.nj.us/dobi/consmnu.shtml
to find out more than you probably ever wanted to
know.
Q: What type of insurance is required to purchase
and maintain a New Jersey tag and registration?
A: All vehicles registered in New Jersey
require three types of mandatory insurance:
-- Liability insurance pays others for damages that
you cause if you are responsible for an accident. It
does not cover medical expenses.
-- Personal injury protection (PIP) pays medical
expenses if you or other persons covered under your
policy are injured in an automobile accident. Often
called No- Fault coverage, it pays your medical
expenses if you were or were not at fault.
-- Uninsured motorist coverage protects you if you
are in an accident with someone who lacks the
minimum level of insurance required by law.
You can opt for a Standard policy (no-fault) with
15/30/5 limits or a Basic policy (tort) with 10/10/5
limits. The first two figures refer to bodily injury
liabilitym and the third figure to property damage
liability. For example, 15/30/5 means coverage up to
$30,000 for all persons injured in an accident,
subject to a limit of $15,000 for one individual,
and $5,000 coverage for property damage.
If this confuses you as much as it does most PhDs,
you can just go to your insurance agent, be brutally
honest about your finances, assets, and all other
things you wouldn’t even discuss with your
hairdresser, and let him/her confuse you further.
Q: An insurance company denied me coverage. Isn’t
that illegal?
A: You can never be denied auto insurance
based on your gender, race, or ethnicity. In most
circumstances, a company cannot refuse to sell you
insurance based on where you live as long as you are
an “eligible” person. (This has nothing to do with
being married or not. A driver is considered an
"eligible" person for insurance in the voluntary or
"regular" market if he or she has fewer than seven
insurance eligibility points on his or her record.)
If you are denied auto insurance coverage, the agent
or company must state a reason. Common reasons
include:
-- You are not an “eligible” person due to the
number of points on your record.
-- The insurer is a “membership company” that only
covers certain categories of drivers.
-- The Department of Banking and Insurance has
permitted the insurer to stop writing new policies.
-- They just don’t like you. (Just kidding.)
Q: What if I fail to keep insurance on my vehicle
that I’ve registered in New Jersey?
A: New Jersey state law requires that any
registered vehicle be covered by an insurance
policy. Failure to maintain coverage can lead to
higher prices for new policies, placement in the
“assigned risk” pool, suspension or revocation of
your driver’s license or registration, and
additional fines and penalties. Then “Jerk Alert”
will be written on your file, and no will like you
any more, either.
Q: What documents do I have to provide to get
insurance?
A: That can vary, so be sure to ask and make
a list of what is needed. You will be asked to
provide a copy of your driver’s license and
registration certificate for each covered vehicle,
and you may be asked to supply other information or
documents. Companies cannot require you to provide a
copy of your driver’s "abstract," or Division of
Motor Vehicle record. You may wish to bring one if
you do not have time to wait for the company to
obtain one. It’s up to you. If the company asks you
for documents that seem strange or out of the
ordinary, like your dog’s vet record or your
personal address book, you can contact the New
Jersey Department of Banking and Insurance here
http://www.state.nj.us/dobi/consmnu.shtml and file a
complaint, or you can just hang up the phone and
call some other insurer.
Q: Can I do anything to reduce the cost of my
insurance?
A: Yes. Outside of giving up driving
altogether, you can do things like give yourself
enough time to shop around. Prices vary from company
to company. At the time of purchase, you will be
asked to complete a "coverage selection form." Read
the form carefully. You can pay less by taking
advantage of cost-saving options available. Buy only
the insurance you need. You can also help lower the
cost of insurance for yourself and everybody else in
New Jersey by reporting insurance fraud and spotting
aggressive drivers who cause accidents. But then you
could be called something that might hurt your
feelings, and so you have to choose: “snitch” or
“save” – only you can decide.
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