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Types Of NJ Auto Insurance Coverage
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New Jersey Auto Insurance Articles
How much New Jersey car insurance should
you buy? Any insurance agent worth their salt will tell you that you should buy
as much as you can afford. While this is a good rule of thumb, it's about as
useful as a stock broker's tip to buy low and sell high. It might be sound logic
but it doesn't get you any closer to an educated decision.
There are several that need consideration
in order to make that educated decision. First, what is the New Jersey required
minimum coverage? Second, what does the minimum cover? Third, what other
coverage is available and can you afford it? And finally, what are you
protecting?
New Jersey Car Insurance Coverage
Definitions:
- Bodily Injury Liability - Covers other
people's bodily injuries or death for which you are responsible. It also
provides for a legal defense if another party in the accident files a
lawsuit against you. Claims for bodily injury may be for such things as
medical bills, loss of income or pain and suffering. In the event of a
serious accident, you want enough insurance to cover a judgment against you
in a lawsuit, without jeopardizing your personal assets. Bodily injury
liability covers injury to people, not your vehicle. Therefore, it's a good
idea to have the same level of coverage for all of your cars. Bodily Injury
Liability does not cover you or other people on your policy. Coverage is
limited to the terms and conditions contained in the policy.
- Comprehensive Physical Damage Coverage
- Covers your vehicle, and sometimes other vehicles you may be driving for
losses resulting from incidents other than collision. For example,
comprehensive insurance covers damage to your car if it is stolen; or
damaged by flood, fire, or animals. Pays to fix your vehicle less the
deductible you choose. To keep your premiums low, select as high a
deductible as you feel comfortable paying out of pocket. Coverage is limited
to the terms and conditions contained in the policy.
- Collision Coverage - Covers damage to
your car when your car hits, or is hit by, another vehicle, or other object.
Pays to fix your vehicle less the deductible you choose. To keep your
premiums low, select as large a deductible as you feel comfortable paying
out of pocket. For older cars, consider dropping this coverage, since
coverage is normally limited to the cash value of your car. Coverage is
limited to the terms and conditions contained in the policy.
- Medical Payments - Covers medical
expenses to you and your passengers injured in an accident. There may also
be coverage if as a pedestrian a vehicle injures you. Does NOT matter who is
at fault. Coverage is limited to the terms and conditions contained in the
policy.
- Uninsured Motorist Coverage - Covers
bodily injuries to you and your passengers when the other person has no
insurance or not enough insurance in a crash that is not your fault. In some
states, there is also uninsured motorist coverage for damage to your
vehicle. Given the large number of uninsured motorists, this is very
important coverage to have, even in states with no-fault insurance. Coverage
is limited to the terms and conditions contained in the policy.
- Personal Injury Protection Coverage -
Covers within the specified limits, the medical, hospital and funeral
expenses of the insured, others in his vehicles and pedestrians struck by
him. The basic coverage for the insured's own injuries on a first-party
basis, without regard to fault. It is only available in certain states.
- Property Damage Liability - Covers you
if your car damages someone else's property. Usually it is their car, but it
could be a fence, a house or any other property damaged in an accident. It
also provides you with legal defense if another party files a lawsuit
against you. It is a good idea to purchase enough of this insurance to cover
the amount of damage your car might do to another vehicle or object.
Coverage is limited to the terms and conditions contained in the policy.
What else is available and can you afford
it? Did you come across a New Jersey auto insurance coverage and think, "I need
that but it isn't required by New Jersey law" when you were reviewing the
coverage definitions? Chances are you did. Can your budget afford the additional
expense of these protections? Or maybe more to the point; can you afford not to
have these additional protections?
What assets need to be protected from being
plucked away if you cause injury or damage?
- Your car itself. If this is a
significant asset, or at least the bank you owe money to thinks so, then you
will need comprehensive and collision.
- Your net worth. Do you have an
enormous net worth to protect. If so, either get it out of your name and
into a trust or buy all the insurance you can. If you have little or nothing
to protect, then you can get by with less and still be financially
responsible.
After you determine how much protection to
get, always ask how much more it is for the next level higher. Very often, you
can get significantly more New Jersey car insurance coverage for very little
cost.
New Jersey Car insurance isn't flashy.
There is no "wow" factor and the opposite gender isn't going to be impressed by
the size of your policy. But not having enough can be the difference between
financial stability and financial ruin.
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