Words of Advice About Renewing Your Car Insurance

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Three Words...Basic Is Bad.

Current New Jersey automobile insurance laws offer a number of choices in an attempt to “cut costs” and save you money.  Sometimes what appear to be money saving choices really are not in your best interests.  Please save this flyer, and pull it out when it comes time to renew your automobile insurance policy, so you can review your policy with these suggestions in mind. 

1. DO NOT CHOOSE THE “BASIC POLICY”

Auto insurance companies offer a “basic policy” which only provides very limited medical coverage and trivial liability coverage. If you have any income whatsoever, or you have even minimal assets, DO NOT CHOOSE THIS POLICY.  Without sufficient coverage, you can be sued for damages from an accident. If a plaintiff is successful, a judgment can dramatically affect your financial future, your credit rating and even your ability to own or drive a car.  Your income can be garnished or your assets can be seized.

2. CHOOSE THE HIGHEST UNINSURED/UNDERINSURED COVERAGE POSSIBLE

Uninsured/underinsured coverage protects you and your family if you are hit by a driver with insufficient coverage. This coverage is critical! Even though the law requires all drivers to have at least minimal insurance coverage, some drivers will continue to go without insurance, or will only purchase the minimum amount of insurance, or will elect the new “basic policy.” You need the highest uninsured/underinsured (UI/UM) coverage possible. This coverage is relatively inexpensive, and should always be the same as your liability coverage.  

3.  CHOOSE ADEQUATE LIABILITY PROTECTION

Liability insurance is what protects your family and assets in the event you cause an accident.  We recommend that you purchase a minimum of $100,000 in protection for bodily injury liability and uninsured/underinsured motorist coverage coverage.

4.  THE LAWSUIT LIMITATION OPTION

Current New Jersey law continues to offer an option of allowing you to give up your rights to recover damages for certain injuries in exchange for a significant reduction in premium.  If you give up these rights, however, you may not be compensated even if you sustain a prolonged or painful injury.  You should evaluate whether the premium cost savings is worth giving up these rights on behalf of yourself and your family if they should be injured in an accident.  We recommend that, if at all possible, you purchase the No Limitation on Lawsuit Option.

5.  PERSONAL INJURY PROTECTION (PIP) OPTIONS AND MEDICAL COVERAGE

Current law allows many different options regarding medical coverage. You should maintain your right to choose your own doctors. Do not choose any plan requiring “precertification of all treatment” by your insurance company. Choose $250,000 PIP coverage, since many private health plans exclude treatment for auto injuries or require repayment to them form any compensation awarded to you.

If you are confused about your choices, or if you have any questions, please call us and we will be happy to talk to you! 

June 2017, Written by Larry Kroll