Auto Insurance NJ Consumer Resources Online Help
NJ Auto Insurance FAQ
Private Passenger Automobile Insurance
Why is NJ automobile insurance sometimes referred to as a "packaged policy?"
What are the parts of the package?
Before the 1950's, if a person wanted to purchase all the coverage that the
modern day automobile insurance policy provides, he or she would have had to
purchase at least four separate policies. Changes in the laws that regulate the
sale of insurance now allow the insurance industry to sell policies that combine
the separate coverages into one all encompassing policy.
The main advantages of combining the various coverages on you auto insurance in
NJ are lower expenses, and therefore a lower cost to consumers, and the
convenience of being able to purchase the property, automobile liability and
other coverages in a single policy.
The standard private passenger automobile insurance policy in New Jersey can
have up to four different coverages. Only the first coverage is standard - the
remaining three coverages are optional.
Part A provides liability coverage that protects the insured from lawsuits
arising from either the negligent operation or ownership of a covered
automobile. There are two auto insurance in NJ coverages provided in Part A -
bodily injury liability (BIL) and property damage liability (PDL).
BIL auto insurance in NJ provides coverage for the bodily injury claims of
people you negligently injure in an accident.
PDL auto insurance in NJ provides coverage for any third party property damage
claims that the courts determine you are responsible to pay.
Part B Auto insurance in NJ provides medical payments to the policyowner and any
other passengers in the car when there is an accident.
Part C auto insurance in NJ provides uninsured motorist and underinsured
motorist protection for the policyowner.
Both coverages are designed to compensate the injured policyowner when the
negligent driver has an insufficient amount of liability auto insurance in NJ
insurance under his/her own policy. Typically, Part C covers only bodily injury
losses, but property damage losses are included in some states.
Part D covers damages to your car when it is involved in an accident.
I have an older car whose current market value is very low - do I really need
to purchase NJ automobile insurance?
Most states have enacted compulsory insurance laws that require drivers to have
at least some automobile liability insurance, Part A. These laws were enacted to
ensure that victims of automobile accidents receive compensation when their
losses are caused by the actions of another individual who was negligent.
Except for the minimum liability auto insurance in NJ coverages that you may be
required to purchase, many people with older cars decide not to purchase any of
the physical damage coverages. It is often the case that the cost of repairing
the damages to an older car is greater than its value. In these cases, your
insurer will usually just "total" the car and give you a check for the car's
market value less the deductible.
Many people forgo the Part D coverages because of the relatively low values of
their automobiles.
Suppose I lend my car to a friend, is he/she covered under my NJ automobile
insurance policy?
Whenever you knowingly loan your car to a friend or an associate, he or she will
be covered under your NJ automobile insurance policy. In fact, even if you do
not give explicit permission each time a person borrows your car, they are still
covered under your automobile insurance policy in NJ as long they had a
reasonable belief that you would have given them permission to drive the car.
What coverage does my New Jersey automobile insurance policy provide me when I
rent a car?
The answer to this question is not as easy as it once was. In the
not-too-distant past, most automobile insurance policies would extend coverage
to rental cars whenever you rented one. This is not quite true anymore.
In most cases, your personal automobile insurance policy will provide coverage
only when you are renting a car on vacation. Many insurance companies no longer
extend personal automobile insurance coverage when you are traveling on
business. The best way to find out what rental car coverage you have under your
automobile policy is to call your auto insurance in NJ insurance agent/company.
What is the difference between NJ collision NJ physical damage coverage and NJ
comprehensive physical damage coverage?
Both collision and comprehensive are Part D auto insurance in NJ coverages.
Collision is defined as losses you incur when your automobile collides with
another car or object. For example, if you hit a car in a parking lot, the
damages to your car will be paid under your collision coverage.
Comprehensive provides coverage for most other direct physical damage losses
Comprehensive provides coverage for most other direct physical damage losses you
could incur. For example, damage to your car from a hailstorm will be covered
under your comprehensive coverage.
It is important to know the differences between the collision and comprehensive
coverages for a couple of reasons.
First, in order to make an informed purchasing decision about these optional
coverages, you need to know the difference between them.
Second, the deductibles under the collision and comprehensive coverages are
often different in amount.
What should I do if I have an accident?
The duties you need to perform after you have an accident are prescribed both by
NJ state law and by the terms of your contract. Obviously, the first thing you
should do is make sure everyone is all right and call an ambulance if one is
needed.
Second, for most accidents in most states, the police should be notified.
Third, you should give the other driver(s) involved in the accident your name,
address, telephone number, and the name of your auto insurance in NJ insurance
company and/or your insurance agent. You also need to get this same information
from the other driver(s).
Fourth, at the first opportunity, you should contact either your insurance agent
or your insurance company to notify them that you have been involved in an
accident.
Finally, there are a number of conditions in the auto insurance in NJ insurance
contract that you must satisfy in order to receive compensation from your
insurer. For example, you need to cooperate with your insurer during any
investigation undertaken during the claims settlement process. Failure to
complete any of these actions can, and sometimes does, result in non-payment by
your insurance company for losses that otherwise would have been covered.
What factors can affect the cost of my automobile insurance? A number of factors
can affect the cost of your automobile insurance - some of which you can control
and some which are beyond your control. The type of car you drive, the purpose
the car serves, your driving record, and where you live can all affect how much
your automobile insurance will cost you. Even your marital status can affect
your cost of insurance. Statistics show that married people tend to have fewer
and less costly accidents than do single people.
What should I consider when purchasing automobile insurance? There are a number
of factors you should consider when purchasing any product or service, and
insurance is no different.
Here is a checklist of things you should consider when purchasing automobile
insurance.
First, purchase the amount of auto insurance in NJ liability coverage which
makes sense for you. Second, you should decide which optional coverages you
want. For example, do you want the optional physical damage coverages in Part D
or is the market value of your car too low to warrant purchasing them.
Finally, once you have decided what you want in your automobile insurance
policy, you can now decide who you would like to purchase the insurance from.
For example, you may decide you like the idea of purchasing insurance from a
mutual company rather than a stock company. You should also decide whether you
would like an insurance agent to assist you in your purchasing decision or if
you would like to buy the insurance directly from a company that sells insurance
over the phone or through the mail.
How can I lower my NJ automobile insurance rates? There are a number of things
you can do to lower the cost of your NJ automobile insurance. The easiest thing
to do is to shop around. It is not surprising to find quotes on automobile
insurance that can vary by hundreds of dollars for the same coverage on the same
car. When you shop, be careful to make sure each insurer is offering the same
coverage. Many insurers use the ISO policy forms, but this is not always the
case.
Another way to lower the cost of your automobile insurance is to look for any
discounts that you may qualify for. For example, many insurers will offer you a
discount if you insure multiple cars under the same policy, or if you have had a
driver education class in the last five years. Be sure to ask your agent or your
company about their discount plans.
Another easy way to lower the cost of your automobile insurance is to increase
the deductible. Simply raising your deductible from $250 to $500 can lower your
premium sometimes by as much as five or ten percent. However, you should be
careful to make sure that you have the financial resources necessary to handle
the larger deductible.