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 How to get 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 How to get coverage for the bodily injury claims
of people you negligently injure in an accident.
PDL auto insurance in NJ How to get coverage for any third party property
damage claims that the courts determine you are responsible to pay.
Part B Auto insurance in NJ How to get medical payments to the policyowner
and any other passengers in the car when there is an accident.
Part C auto insurance in NJ How to get 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 How to get coverage for most other direct physical damage
losses
Comprehensive How to get 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.