Over the years, the rate of traffic crashes in New Jersey has been increasing. New Jersey saw more than 6,000,000 drivers in 2019, so it’s not surprising that there were over 200 000 accidents in 2019. The New Jersey Assigned Risk Plan was created to address these concerns. This plan was created to ensure that high-risk drivers with poor credit are insured.
New Jersey Personal Automobile Insurance Plan. (NJ PAIP).
In some states, it may be harder to find affordable car coverage for high risk drivers. Some insurance companies may reject you if you have a poor credit history or if there are any negative marks on your driving record. In 1992, the New Jersey Assigned Risk Plan was created. This government initiative, also known as the New Jersey Personal Automobile Insurance Plan or NJ PAIP, is designed to offer motorists in the state car insurance when private insurers have turned them down due to their driving record or credit score.
The NJ PAIP is not an insurance agency. It is an insurance program that matches drivers to companies to provide adequate coverage. Also known as an “assigned risks plan”,
Who is eligible to receive the NJ PAIP
As with all state-sponsored insurance programs you will need to prove that you have not been able to obtain regular insurance. This is at least two times within the 60 day period. The NJ PAIP is only available to those who have had all other insurance options declined.
Additional requirements may include:
- New Jersey resident, licensed driver
- New Jersey Vehicle registration
- Suspended License for Uninsured
- License reinstatement requires insurance
While your credit score is not important when applying for PAIP, it can contribute to your premiums in certain cases. However, there are some factors that could still make you ineligible.
- Invalid driver’s licence
- History of car insurance policies that have lapsed or were not paid in full
- Refrain from disclosing information in your application
You can apply again even if you have been turned down by the PAIP if you no longer meet the eligibility criteria.
What coverage is offered by the NJ PAIP and what are its limitations?
Drivers have the option of choosing between a standard or basic policy under the New Jersey Assigned Risk Plan. The latter offers fewer coverage options. The basic policy doesn’t include bodily injury as part of the minimum coverage, but it does offer it as an optional add-on up to $10,000 per incident. Basic coverage includes property damage coverage up to $5,000 per accident, and personal injury protection up to $15,000 per person per incident. Standard coverage includes bodily injury coverage, property loss coverage, and collision and comprehensive coverages.
Drivers who are eligible for coverage by high-risk auto insurance companies that are part of the New Jersey Assigned Risk Plan must be covered for at least three years. If you’re a high-risk driver who fails to obtain regular insurance during that period, you may be eligible to apply again for PAIP. While coverage options can vary from one provider to the next, comparing all options will help you determine what is best for your budget and needs.
What is the cost of car insurance with the New Jersey Assigned Risk Plan
The cost of high-risk insurance for cars is usually higher than those available in the general market. The NJ Assigned Risk Plan follows that trend. You may have to raise your coverage limits depending on which plan you choose to meet the state’s minimum requirements. The factors individual insurance providers consider when setting a price for you will affect your premium. This could include your ZIP code and marital status.
You have two options for paying the NJ PAIP premium. Either you pay the entire annual premium upfront or you pay a 30% deposit and then the remainder in monthly installments. You are not required to remain with this program if you can get a lower policy elsewhere. Your remaining premiums can be cancelled at any time. To avoid any coverage lapses, make sure that your replacement policy is in effect before you cancel your NJ PAIP plan.
How to purchase insurance through the NJ PAIP
To get a precise quote, go to the official website of the NJ PAIP. Fill out the form. Your information will be used to calculate the cost of insurance, and matched you with high-risk insurers. It is therefore important to provide as much detail as you can.
You must agree to provide insurance for three years regardless of your driving record to the NJ PAIP company you are assigned. The three-year obligation is a significant benefit, as it will limit your options when it comes high-risk providers.
Alternatives to the NJ PAIP
New Jersey is a state that offers low-cost insurance to drivers of all income levels. If you are looking for ways to obtain high-risk insurance, there are many options. You have these options in New Jersey, in addition to the Assigned Risk plan, if you have poor driving records or have little credit.
- Special Automobile Insurance Policy: This is another government program, but it is only for those who have Medicaid with hospitalization. It is also known as New Jersey Dollar a Day Car Insurance. It provides medical coverage only for emergency treatment following an accident.
- Insurance companies that are open to high-risk drivers It is possible for insurers to accept high-risk drivers. However, you may need to do some research and not be guaranteed coverage for three years. In New Jersey, insurers cannot use credit scores to determine premiums. National insurers offer different coverage options for motorists who have been convicted of DUIs, other offenses, or are currently in jail.
New Jersey’s laws aim to provide car insurance to all motorists. You may be eligible for discounts from most insurance companies that will reduce your annual premiums. You may also be eligible for insurance through state-sponsored initiatives.
Questions frequently asked
Which is the best auto insurer?
Insurance is subjective and individual. No one company can be considered the best. The best-known insurance providers are those that offer the best combination of affordable prices and excellent customer service, as well as discounts and coverage options.
What amount of insurance do I need for New Jersey?
New Jersey minimum requirements for car insurance are bodily injury coverage at $15,000 per person, $30,000 per accident, and $5000 property damage coverage. Drivers also need to carry $15,000 in personal injury protection, $15,000 in uninsured/underinsured motorist coverage for bodily injury and $5,000 for property damage.
How can I save money on my car insurance?
Two of the best ways to reduce your insurance premiums are choosing an affordable provider that offers the coverage you require and taking advantage discount opportunities. Many insurers offer basic discounts for having good driving habits, owning a home, bundling insurance policies, having a safe car, and being loyal customers. High-risk drivers may be able to receive additional discounts by contacting the provider directly.
