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Albert Buzzetti & Associates, L.L.C.

Understanding New Jersey's Basic Car Insurance Policy

New Jersey law requires every driver to carry motor vehicle insurance. Still, up to 600,000 New Jersey drivers choose to break the law, usually because they believe they can't afford to buy insurance. In reality, it is always much more expensive to go without coverage.

New Jersey uninsured motorists can be fined, lose the right to drive or be imprisoned. If an accident happens, an uninsured car owner has to pay the full cost of repairs and can be held personally responsible for accident victims' medical bills and other damages. Even if there is proof that someone else is legally responsible for causing the accident, the law forbids an uninsured driver from suing the responsible person. Soon the law will even allow officials to impound a driver's car if it is found to be uninsured. These are strong incentives for drivers to obtain insurance.

All New Jersey drivers are eligible to purchase a basic policy at low cost. While the basic policy does have some notable gaps in coverage, it keeps drivers from violating the law and provides protection in the event of minor accidents.

The New Jersey basic policy includes personal injury protection coverage, which will pay medical bills of up to $15,000 for each injured person covered by the policy, and property damage coverage, which will pay up to $5,000 to anyone whose property is damaged in an accident caused by the insured person. It does not provide coverage for injuries an at-fault driver inflicts on another person.

New Jersey residents who purchase basic insurance can choose to pay extra for bodily injury liability coverage. Some insurance companies also will sell collision and comprehensive coverage. Collision coverage compensates insured drivers for collision damage to their own cars. Comprehensive insurance covers damage to the insured car that is not caused by a motor vehicle accident, like theft or hail damage.

Basic insurance can be a boon to drivers who otherwise could not afford any coverage at all. However, most people would benefit significantly from upgrading to a standard policy. Standard policies have more realistic coverage limits and provide protection against personal liability to drivers who cause an accident that injures another person.

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