Types of Auto Insurance Coverage in New Jersey

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Types of Auto Insurance Coverage in New Jersey

New Jersey’s automobile insurance system abides by the principles of a “mixed” or “choice” system, providing individuals with the opportunity to obtain traditional (“at fault”) or “no fault” insurance coverage. With “no fault” policies, insurance companies are expected to compensate individuals who are injured during motor vehicle accidents for monetary losses, regardless of who was responsible for causing these accidents. This category of insurance coverage stands in stark contrast to an “at fault” system, in which a prolonged investigation is conducted in order to determine the party who was primarily responsible for causing the accident, subsequently requiring his or her insurance provider to cover the majority of costs incurred as a result.

Although there is a degree of choice when determining one’s type of insurance coverage, with significant implications for drivers who are injured during motor vehicle accidents, there are also certain requirements associated with auto insurance that apply to drivers state-wide. The necessity for auto insurance among all New Jersey drivers, the main types of insurance policies, and the associated mandatory coverage thresholds for each are detailed in three pieces of legislation that comprise the foundation of the State’s auto insurance system: the Compulsory Insurance Law, the Automobile Reparation Reform Act (also known as the “No Fault” Act), and the Uninsured Motorist Act, each of which is summarized below.

When you or someone you love has been injured during an automobile accident, the steps that must be taken to obtain just compensation for your injuries can often seem like insurmountable hurdles. The attorneys at Chamlin, Rosen, Uliano & Witherington regularly represent clients in car accident injury lawsuits, providing the comprehensive and aggressive legal representation that is required to achieve a positive outcome. Contact our offices immediately at 732-440-3950 for a free consultation about your claim and find the information you need to move forward.


Types of Car Insurance Policies in New Jersey

As previously stated, the three primary pillars of New Jersey’s automobile insurance system are: the Compulsory Insurance Law, the Automobile Reparation Reform Act (also known as the “No Fault” Act), and the Uninsured Motorist Act, all of which were implemented in 1972.  Below is a comprehensive overview of these three pieces of legislation (including certain amendments made at later dates), and the associated implications for New Jersey drivers.

The Compulsory Insurance Law requires every owner of a motor vehicle in New Jersey to obtain motor vehicle liability insurance coverage for bodily injury sustained by any individual while operating a motor vehicle. The coverage threshold is a minimum of $15,000 for one person and $30,000 for more than one person for a Standard Insurance Policy.

The Automobile Reparations Reform Act (also known as the No Fault Act), outlines the requirements associated with New Jersey’s “No Fault,” system, which entitles a driver (and resident members of his or her household who sustain bodily injury during the operation of an automobile), to obtain monetary compensation from their insurance provider, regardless of their responsibility for causing the accident.

Specifically, the No Fault Act mandates that every Standard Auto Insurance Policy must include “Personal Injury Protection” (PIP), which encompasses a range of benefits including medical expenses, income continuation benefits (to replace lost income), essential services benefits (to pay for services that you are no longer able to perform because of your injuries), and funeral costs. The coverage thresholds of PIP benefits for a Standard Policy are: medical expenses up to $250,000; income continuation up to $5,250; essential services up to $4,380; death benefits up to $9,580; and funeral expenses up to $1,000.

In 1998, the No Fault Act was amended to allow automobile owners to opt for a Basic Auto Insurance Policy in lieu of a Standard Policy. The coverage thresholds of PIP benefits for a Basic Policy are: medical expenses up to $15,000 for one person and up to $30,000 for more than one person in a given accident; and property damage up to $5,000. *Does not include any liability insurance for bodily injuries; however, a policyholder may obtain additional coverage up to $10,000.

In 2003, the No Fault Act was amended again, as lawmakers created a Special Auto Insurance Policy, which is available to a selection of eligible “low-income individuals” who are currently enrolled in the Federal Medicare Program. The coverage thresholds of PIP benefits for a Special Policy are: emergency medical expenses up to $250,000 (only applicable to certain injuries which require immediate treatment at hospitals and/or trauma centers).

The Uninsured Motorist Act requires all types of motor vehicle liability insurance policies to include what is known as “Uninsured Motorist Coverage.” Uninsured and underinsured motorist coverage is essential when an accident involves another individual who either does not have an auto insurance policy (uninsured) or does not have an auto insurance policy with limits that can compensate for the other driver’s incurred costs (underinsured). The coverage threshold for Uninsured Motorist Coverage is a minimum of $15,000 per person and $30,000 per accident. In addition, policyholders may opt for additional uninsured and underinsured motorist coverage with split limits of $250,000/$500,000 or a single limit of $500,000 (not to exceed the liability limits of the policy). Split Limits divide insurance coverage among each individual involved in a motor vehicle accident, while a Single Limit applies one sum to the accident as a whole.


New Jersey Car Insurance Coverage

The law firm of Chamlin, Rosen, Uliano & Witherington unites experience with compassion, with attorneys who serve as passionate legal advocates for each of their clients. If you have been involved in a motor vehicle accident in New Jersey or if you are a New Jersey resident who was involved in a motor vehicle accident in another state, contact us online or call 732-440-3950 as soon as possible for a free consultation.

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Chamlin, Rosen, Uliano & Witherington of West Long Branch, New Jersey, provides representation throughout Monmouth County including Asbury Park, Belmar, Colts Neck, Deal, Eatontown, Freehold, Hazlet, Holmdel, Howell, Lake Como, Long Branch, Manalapan, Manasquan, Marlboro Township, Middletown, Neptune, Oakhurst, Ocean Township, Redbank, Shrewsbury, Spring Lake, Tinton Falls, Wall Township, West Long Branch, and Freehold Township; Ocean County including Bayville, Brick, Jackson, Lakewood, Lakewood Township, Mantoloking, Point Pleasant, Point Pleasant Beach, and Toms River; Middlesex County including East Brunswick, Milltown, New Brunswick, Old Bridge Township, Perth Amboy, Sayreville, South Amboy, South River, and Spotswood.

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