New Jersey Auto Insurance
General Information
COVERAGES — Your New Jersey auto insurance policy is divided into different coverages based on the type of claim that will be paid to you or others.
These COVERAGES are:
PERSONAL INJURY PROTECTION — Otherwise known as “PIP,” this is your medical coverage for injuries you (and others) suffer in an auto accident. PIP pays if you or other persons covered under your policy are injured in an auto accident. It is sometimes called “no-fault” coverage because it pays your own medical expenses no matter who caused the auto accident. PIP has two parts – (1) coverage for the cost of treatment you receive from hospitals, doctors and other medical providers and any medical equipment that may be needed to treat your injuries and (2) reimbursement for certain other expenses you may have because you are hurt, such as lost wages and the need to hire someone to take care of your home or family.
LIABILITY — This coverage pays others for damages from an auto accident that you cause. It also pays for a lawyer to defend you if you are sued for damages that you cause.
There are two kinds of liability coverage: BODILY INJURY and PROPERTY DAMAGE.
BODILY INJURY LIABILITY COVERAGE — Pays for claims and lawsuits by people who are injured or die as a result of an auto accident you cause. It compensates others for pain, suffering and economic damages, such as lost wages.
This coverage is typically given as two separate dollar amounts: (1) an amount paid per individual and (2) an amount paid for total injuries to all people injured in any one accident that you cause. It can sometimes be purchased as a combined single limit, which offers a maximum limit of protection per accident of bodily injury and property damage liability combined.
 PROPERTY DAMAGE LIABILITY COVERAGE — Pays for claims and lawsuits by people whose property is damaged as a result of an auto accident you cause. (May also be purchased as a combined single limit with bodily injury liability coverage.)
UNINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by an uninsured motorist.
UNDERINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage
COLLISION COVERAGE — Pays for damage to your vehicle as the result of a collision with another car or other object.
COMPREHENSIVE COVERAGE — Pays for damage to your vehicle that is not a result of a collision, such as theft of your car, vandalism, flooding, fire or a broken windshield. However, it will pay if you collide with an animal
UNDERSTANDING YOUR POLICY
There are two common types of auto insurance policies in New Jersey. They are referred to as Standard and BASIC. Both offer options as well.
STANDARD POLICY — The Standard Policy provides a number of different coverage options and the opportunity to buy additional protection. The Standard Policy is the type of policy chosen by most New Jersey drivers.
BASIC POLICY — The Basic Policy usually costs significantly less than a Standard Policy, but provides limited benefits. It is not for everyone, but it does provide enough coverage to meet the minimum insurance requirements of New Jersey law. The Basic Policy could be an option for those with few family responsibilities and few assets to protect (including income from a job).
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