Car Insurance in New Jersey – Know the Basics

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New Jersey requires auto insurance. However, the cost and type of coverage may vary. Consumers are discovering that there are many options to help them comply with the law. All drivers must have a basic insurance policy under the New Jersey Automobile Insurance Cost Reduction Act.
Uninsured drivers are in violation of the law. Driving without insurance is a crime that can lead to severe penalties. You risk financial loss, fines, suspension of your driver’s license, registration, and even jail time. If you are caught driving without insurance, your car may be impounded.

People with little or no assets and family responsibilities should consider the Basic Policy. This policy can be used to transition younger drivers into work. It provides basic protection, even when they are not able or able afford it, for those who have just started driving.

Let’s take a look at the New Jersey Auto Insurance Basic Policy. The Basic Policy provides less protection but is more affordable than the Standard Insurance policy .

Bodily Injury Liability

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You are covered for lawsuits and claims by anyone who is injured in an accident that you caused. Although coverage is not provided, $10,000 coverage per person is an option.

Property Damage Liability

You are covered for lawsuits and claims arising from property damage caused by an accident that you cause. You are covered up to $5,000 per accident.

Personal Injury Protection

Your policy provides coverage for injuries you sustain in an auto accident. The policy provides coverage for $15,000 per person and per accident, as well as up to $250,000 per permanent or serious injury.

Uninsured/Underinsured Motorist Coverage

This coverage will pay for bodily injury or property damage if you are involved in an accident that is caused by an uninsured driver (a driver without the minimum insurance required by law). This coverage is not available in the Basic Policy.

Collision

You will be covered for any damage to your vehicle that results from a collision with another vehicle or object. This coverage is not part of the Basic Policy.

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Comprehensive

You will be covered for any damage to your vehicle, even if it isn’t caused by a collision. This includes theft, vandalism and flooding. Comprehensive coverage covers you if your vehicle collides with an animal. This coverage is not available on the Basic Policy.

Comprehensive and collision coverage are options available on policies issued through PAIP (Personal Automobile Insurance Plan), or voluntary policies issued to some insurance companies. This coverage is essential for any vehicle owner who has a loan or lease that calls for it.

The Dollar a Day Auto Insurance Policy, or the Special Automobile Insurance Policy (SAIP), is another affordable option for car insurance in New Jersey. This new initiative aims to make limited auto insurance coverage accessible to eligible drivers who are eligible for Federal Medicaid and hospitalization . A $365 per year policy can be purchased by such drivers.

Federal Medicaid patients who have been hospitalized are eligible to apply for the Dollar a Day program. If the Card Run Identifier in the upper left corner of your Medicaid ID card shows an asterisk after the code, and the “SAIP” printed on the lower center of the card, you are eligible.

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Most insurance agencies can provide the SAIP policy. You have two payment options. One is to pay upfront at $360, and the other in two installments at $365.

The policy covers emergency treatment within 24 hours of an accident, as well as treatment for serious brain or spinal cord injuries. It can be extended to $250,000. The policy also includes a $10,000 death benefit. It doesn’t cover outpatient treatment such as doctor’s visits covered under Medicaid.

Only those who are enrolled in Medicaid will be covered by the policy. The policy can cover one car as well as multiple people who are enrolled in Medicaid. There can only be one policy per car.

You will need to bring your driver’s licenses and vehicle registration to apply for the policy. Also, you will need to have your Medicaid identification card to prove that all the persons covered by the policy are enrolled in Medicaid.

For both these types of New Jersey car insurance policies you should remember that if you don’t have liability coverage you will be responsible for any personal hardships or economic damages (such as lost wages) you cause. If you are sued, the insurer will not pay for or provide a lawyer. If a judgment is filed against you, your assets and wages will be at risk. You cannot sue if you don’t have coverage or someone hits you.

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