New Jersey Auto Insurance Buyers Guide - NJM
NEW JERSEYAUTOINSURANCEBUYER’S GUIDEPhil MurphyGovernorSheila OliverLt. GovernorMarlene CarideCommissioner
NJM Insurance Group offers personal auto insurance in the voluntary market through NewJersey Manufacturers Insurance Company and New Jersey Re-Insurance Company, which havedifferent acceptance criteria. This document complies with regulations implemented by the NewJersey Department of Banking and Insurance as part of the Auto Insurance Competition andChoice Act of 2003.WHERE DO I START?. 1WHAT’S INSIDEUNDERSTANDING YOUR POLICY.1-4Types of CoveragesStandard and Basic PoliciesWhat are Policy Limits and Deductibles?UNDERSTANDING YOUR OPTIONS.5-7Personal Injury Protection (PIP)Uninsured/Underinsured Motorist CoverageComprehensive Coverage/Collision CoverageThe Right to SuePOLICY OPTIONS CHART. 8WHERE TO GET MORE INFORMATION AND HELP. 9Buyer’s Guide A-705 (07/18)
WHERE DO I START?Car insurance is required in New Jersey. Whether you are buying a new insurance policy or renewing yourcurrent policy, you must make many decisions about what coverage you need and how much you can pay. Thefollowing guide outlines how to make choices that work for you.UNDERSTAND YOUR NEEDS. Do you rent or own your own home? Do you have assets to protect (includingincome from a job)? Will your own health insurance cover auto accident injuries? How much insurance coveragecan you afford? These are some of the questions you should ask yourself before choosing a specific coverage plan.UNDERSTAND YOUR OPTIONS. Use this guide to learn about the words and phrases used in auto policies.Know the many coverage options. Review the different benefits of each option.UNDERSTAND CONSUMER PROTECTIONS. As a New Jersey auto insurance consumer, you have rights.You have a right to fair and equal treatment, and you have the right to get the information you need to makeinformed decisions.zz Agents, brokers and companies must inform you of your coverage options when applying for a new policy,or at any time upon your request if you are already insured. You have the right to know how each choicemay affect what you pay and what your benefits would be in the event of an accident. You always havethe right to ask about additional options.zz Youcan shop for auto insurance at any time – not just when your policy is up for renewal, and if you finda better price, you can cancel your old policy and seek a refund of your unused premium.zz Youhave the right to change your coverages and policy limits at any time, even if you are not near yourrenewal date. If you select options that save you money, you have a right to a refund of your unusedpremium within 60 days.UNDERSTANDING YOUR POLICYTypes of CoveragesInsurance policies use terms that may be unfamiliar to the average driver. It is useful to understand what theseterms mean so you can make better, more informed decisions about your coverage.COVERAGES — Your auto insurance policy is divided into different coverages based on the type of claimthat will be paid to you or others.These COVERAGES are:PERSONAL INJURY PROTECTION — Otherwise known as “PIP,” this is your medical coverage forinjuries you (and others) suffer in an auto accident. PIP pays if you or other persons covered under your policyare injured in an auto accident. It is sometimes called “no-fault” coverage because it pays your own medicalexpenses no matter who caused the auto accident. PIP has two parts — (1) coverage for the cost of treatment youBuyer’s Guide A-705 (07/18)1
UNDERSTANDING YOUR POLICYTypes of Coverages continuedreceive from hospitals, doctors and other medical providers and any medicalequipment that may be needed to treat your injuries and (2) reimbursementfor certain other expenses you may have because you are hurt, such as lostwages and the need to hire someone to take care of your home or family.EXAMPLE of UNDERINSURED MOTORISTCOVERAGELIABILITY — This coverage pays others for damages from an auto accidentthat you cause. It also pays for a lawyer to defend you if you are sued fordamages that you cause.There are two kinds of liability coverage: BODILY INJURY andPROPERTY DAMAGE.BODILY INJURY LIABILITY COVERAGE — Pays for claims andlawsuits by people who are injured or die as a result of an auto accident youcause. (See page 7 for lawsuit options). It compensates others for pain,suffering and economic damages, such as lost wages.PROPERTY DAMAGE LIABILITY COVERAGE — Pays for claims andlawsuits by people whose property is damaged as a result of an auto accidentyou cause. (May also be purchased as a combined single limit with bodilyinjury liability coverage.)COMBINED SINGLE-LIMIT LIABILITY COVERAGE — Under theStandard Policy, New Jersey Manufacturers Insurance Company and NewJersey Re-Insurance Company provide Liability Coverage for both BodilyInjury and Property Damage as a combined single limit.UNINSURED MOTORIST COVERAGE — Pays you for property damageor bodily injury if you are in an auto accident caused by an uninsured motorist.Jane purchases 100,000in liability coverage and 100,000 in underinsuredmotorist coverage. Sampurchases only 15,000in liability coverage. Samcrashes his car into Jane’scar, causing 25,000 indamages. Sam’s insurancecompany pays 15,000 ofthe damages, while Jane’sinsurance company paysthe remaining 10,000 fromher underinsured motoristcoverage.UNDERINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are inan auto accident caused by a driver who is insured, but who has less coverage than your underinsured motoristcoverage.COLLISION COVERAGE — Pays for damage to your vehicle as the result of a collision with another caror other object.COMPREHENSIVE COVERAGE — Pays for damage to your vehicle that is not a result of a collision, suchas theft of your car, vandalism, flooding, fire or a broken windshield. However, it will pay if you collide withan animal.EXTENDED MEDICAL EXPENSE COVERAGE LIMIT (NON-PIP) — Provides benefits if you are injuredwhile riding in, or as a pedestrian when struck by, a motor vehicle that is not an “automobile” as defined byState law. Some of these vehicles are buses, motorcycles, taxicabs and commercial trucks. A limit of 10,000is provided at an annual premium of 1 per car.2Buyer’s Guide A-705 (07/18)
UNDERSTANDING YOUR POLICYStandard and Basic PoliciesThere are two common types of auto insurance policies in New Jersey. Theyare referred to as STANDARD and BASIC. Both offer options as well.STANDARD POLICY — The Standard Policy provides a numberof different coverage options and the opportunity to buy additionalprotection. The Standard Policy is the type of policy chosen by mostNew Jersey drivers.SPECIAL POLICYFOR MEDICAIDRECIPIENTS ONLYBASIC POLICY — The Basic Policy usually costs significantlyless than a Standard Policy, but provides limited benefits. It is not foreveryone, but it does provide enough coverage to meet the minimuminsurance requirements of New Jersey law. The Basic Policy could bean option for those with few family responsibilities and few assets toprotect (including income from a job).A Basic Policy is offered solely by NJRe. To request a CoverageSelection Form for a Basic Policy, call NJRe toll-free at 1-800-8826573.See chart on page 4 for differences between the STANDARD and BASICpolices.Buyer’s Guide A-705 (07/18)The Special Policy is a newinitiative to help make limited auto insurance coverageavailable to drivers who areeligible for Federal Medicaidwith hospitalization. Suchdrivers can obtain a medicalcoverage-only policy at a costof 365 a year. For more information, call the Departmentof Banking and Insurance at1-800-446-7467.3
UNDERSTANDING YOUR POLICYStandard and Basic Policies continuedThe chart below compares the differences between the STANDARD and BASIC policies:STANDARD POLICY(NJM OR NJRe)COVERAGEAs low as: 35,000 Combined Limit (NJRe only) 100,000 Combined Limit (NJM only)LIABILITYCOVERAGEAs high as: 500,000 Combined Limit (NJM only)*NJRe only offers 35,000 Combined LimitAs low as: 15,000 per person or accidentPERSONAL INJURYPROTECTIONBodily Injury Liability Coverage: notincluded, but 10,000 for all persons,per accident, is available as an option.Property Damage Liability Coverage: 5,000 per accident 15,000 per person, per accidentAs high as: 250,000 or moreUp to 250,000 for certain injuries*regardless of selected limitUNINSURED/UNDERINSUREDMOTORISTCOVERAGEBASIC POLICY(NJRe only)Up to 250,000 for certain injuries*Coverage is available up to amountsselected for liability coverageNoneCOLLISIONAvailable as an optionAvailable as an optionCOMPREHENSIVEAvailable as an optionAvailable as an option*permanent or significant brain injury, spinal cord injury or disfigurement or for medically necessary treatmentof other permanent or significant injuries rendered at a trauma center or acute care hospital immediatelyfollowing an accident and until the patient is stable, no longer requires critical care and can be transferred toanother facility in the judgment of the physician.UNDERSTANDING YOUR POLICYWhat are Policy Limits and Deductibles?LIMITS — The maximum dollar amount the insurer will payfollowing an auto accident. Limits vary with each coveragewithin the policy.DEDUCTIBLES — Payments you have to make before theinsurer pays. For example, a 750 deductible means that youpay the first 750 of each claim.4EXAMPLEJohn has a car accident. His repair shopestimates the cost of repairs at 2,000. Johnpays 750 of the bill and his insurancecompany pays the remainder.Buyer’s Guide A-705 (07/18)
UNDERSTANDING YOUR OPTIONSPersonal Injury Protection (PIP)Choosinga higherdeductiblemay saveyou moneyon yourpremium.DEDUCTIBLE OPTIONS — In addition to any savings you may realize from howmuch coverage you buy, deductibles also provide savings opportunities. Cost savings canbe achieved by choosing higher deductibles. Thus, if you feel you need a high level ofPIP coverage but want to reduce your premium, you can save money by agreeing to paymore out-of-pocket through a higher deductible if you are injured in an auto accident.Your insurer will pay the medical bills over the deductible amount you choose. No matterwhat deductible you choose, there is also a 20 percent co-payment for medical expensesbetween the deductible selected and 5,000. That means you pay 20 percent, and yourinsurer pays 80 percent.EXAMPLESam and Jane each have an accident that results in 10,000 of medical expenses. Sam chose the minimum 250 deductible. He pays the 250 deductible plus 950 (20 percent of the 4,750 that is left ofthe first 5,000) and the insurer pays the remaining 8,800. Jane chose the 2,500 PIP deductible fora 25 percent reduction in the PIP premium. She pays the first 2,500 as the deductible. She also pays 500 (20 percent of the 2,500 that is left of the first 5,000) and the insurer pays the remaining 7,000.HEALTH CARE PRIMARY — Cost savings can also be achieved by using your own health insurance as aprimary source of coverage in the case of injury related to an auto accident. Before selecting this option, youshould find out if your health insurance will cover auto accident injuries and how much coverage is provided.MEDICARE and MEDICAID cannot be used for the Health Care Primary option.EXTRA PIP PACKAGE COVERAGE — These are additional benefit options provided under the STANDARDPOLICY.INCOME CONTINUATION — If you cannot work due to accident-related injuries, this coverage pays lostwages, less Temporary Disability Benefits you may receive if your disability prevents you from working, up tothe amount you select.ESSENTIAL SERVICES — Pays for necessary services that you normally do yourself, such as cleaning yourhouse, mowing your lawn, shoveling snow or doing laundry if you are injured in an auto accident.DEATH BENEFIT — In the case of death, family members or estates will receive any benefits not alreadycollected under the income continuation and essential services coverages.FUNERAL EXPENSE BENEFIT — Pays for reasonable funeral expenses up to the limit you select if youdie as a result of an auto accident.Buyer’s Guide A-705 (07/18)5
UNDERSTANDING YOUR OPTIONSUninsured/Underinsured Motorist CoverageUNINSURED MOTORIST COVERAGE — Pays you if you are inan auto accident caused by a driver who does not have the minimumlevel of insurance required by law. Claims that you would have madeagainst the uninsured driver who caused the accident are paid by yourown policy. Uninsured motorist coverage does not pay benefits to theuninsured driver.UNDERINSURED MOTORIST COVERAGE — Pays you if you arein an auto accident caused by a driver who is insured, but who has lesscoverage than your underinsured motorist coverage. Damages greaterthan the limits of the other driver’s policy are covered by your policyup to the difference between the limits of your underinsured motoristcoverage and the other driver’s policy limit.If you choosethe STANDARDPOLICY:A minimum amount of Unin-sured/Underinsured MotoristCoverage is required. You canpurchase higher limits if youwant more coverage.UNDERSTANDING YOUR OPTIONSComprehensive Coverage/Collision CoverageCOMPREHENSIVE (also known as comp or other than collision) and COLLISION coverage are notrequired by law, but may be required under the terms of an automobile leasing or financing contract.Collision coverage pays you for damage that you cause to your automobile. You can also make a claim underyour own collision coverage for damage to your car from an auto accident you did not cause. This may takeless time than making a property damage liability claim against the driver who caused the auto accident. Yourinsurer then seeks reimbursement (subrogation) from the insurer of the driver who caused the auto accident.Comprehensive coverage pays you if your automobile is stolen or for damage to your automobile caused by thingsnot covered under collision coverage, such as vandalism, flooding, fire, a broken windshield or damage from an animal.DEDUCTIBLE — The STANDARD deductiblefor comprehensive and collision coverage is 750. Higher and lower deductibles are availableas options. Higher deductibles can reduce yourpremium.NAMED DRIVER EXCLUSION — Preventscertain drivers on your policy from being coveredby collision and/or comprehensive coverage on aspecific automobile. This can lower your premium,but if the excluded driver operates the automobileand is involved in an auto accident, you arenot insured for collision and/or comprehensivecoverage; which means you could be personallyresponsible.6If you choose theSTANDARD POLICY:Comprehensive andCollision Coverage areIf you choose theBASIC POLICY:NJRe offers these options inthe BASIC POLICY.always available as optionsof the STANDARD POLICY.Buyer’s Guide A-705 (07/18)
UNDERSTANDING YOUR OPTIONSThe Right to SueFor the STANDARD POLICY, you must make a choice about the rights you will have if you are injured in anautomobile accident. (The BASIC POLICY includes the LIMITED RIGHT TO SUE option.)IMPORTANTThe choice you make affects howmuch your insurance will costand what claims will be paid inthe event of an accident.The choice you make regardingyour right to sue another driver applies to you, your spouse, childrenand other relatives living with youwho are not covered under anotherautomobile insurance policy.The UNLIMITED RIGHT TO SUEand LIMITED RIGHT TO SUE options only cover lawsuits for “painand suffering” or non-economiclosses. Your medical expenses andsome economic losses for injuriesin auto accidents will be paid up tothe limits of your PIP coverage andare not affected by the choice youmake here.UNLIMITED RIGHT TO SUE —Under the No Limitation on LawsuitOption, you retain the right to sue theperson who caused an auto accident forpain and suffering for any injury.LIMITED RIGHT TO SUE — Bychoosing the Limitation on LawsuitOption, you agree not to sue the personwho caused an auto accident for yourpain and suffering unless you sustainone of the permanent injuries listedbelow: (Choosing this option does notaffect your ability to sue for economicdamages such as medical expenses andlost wages.) loss of body part significant disfigurement or significantscarring a displaced fracture loss of a fetus permanent injury (Any injury shall beconsidered permanent when the bodypart or organ, or both, has not healedto function normally and will not heal tofunction normally with further medicaltreatment based on objective medicalproof.) deathWARNING: Insurance companies or their producers or representatives shall notbe held liable for your choice of lawsuit option (Limited Right to Sue or UnlimitedRight to Sue) or for your choices regarding amounts and types of coverage. Youcannot sue an insurance company or its producers or representatives if the Limited Right to Sue option is imposed by law because no choice was made on thecoverage selection form. Insurers and their producers or representatives can losethis limitation on liability for failing to act in accordance with the law. See N.J.S.A.17:28-1.9 for more information.Buyer’s Guide A-705 (07/18)7
POLICY OPTIONS CHARTOptions ThatCost LessWhat MostDrivers ChooseOptions ThatCost More 35,000 (NJReonly); 100,000 300,000 500,000Medical Expense Limit 15,000; 50,000; 75,000; 150,000 250,000 1 million(NJM only)Medical Deductible 500; 1,000; 2,000; 2,500 250——Extra PIP Options:Income Continuation,Essential Services,Death Benefit andFuneral Expense BenefitYou can declinethe Extra PIPPackageMost consumerschoose theExtra PIP PackageHealth Insurer forPIP OptionChoose yourown healthinsurerMost consumers donot choose theirown health insurer—— 35,000; 100,000 300,000 500,000COLLISIONCOVERAGEDEDUCTIBLE 750; 1,000; 1,500; 2,000 500 100; 150; 200; 250COMPREHENSIVECOVERAGEDEDUCTIBLE 750; 1,000; 1,500; 2,000 500 50; 100; 150; 200LAWSUIT OPTION——Limitation onLawsuit OptionNo Limit onLawsuit OptionCOVERAGESLIABILITY – Bodily Injury andProperty DamagePERSONAL INJURYPROTECTION (PIP)UNINSURED/UNDERINSUREDMOTORIST COVERAGE8Packages maybe available inhigher amountsBuyer’s Guide A-705 (07/18)
WHERE TO GET MORE INFORMATION AND HELPThis Buyer’s Guide is intended to provide general information to helpyou make coverage choices. It is not a substitute for the policy language,which governs. Additional information regarding coverages or premiums isavailable from the insurer or producer.Contact the Department of Banking and Insuranceon the web:www.njdobi.orgby phone:(609) 292-7272or the Consumer Hotline at 1-800-446-7467by mail at:NJDOBIP.O. Box 471Trenton, NJ 08625-0471or in person at:NJ DOBI20 West State StreetTrenton, NJ 08608Contact NJM Insurance Groupby phone:1-800-232-6600Buyer’s Guide A-705 (07/18)9
Use this guide to learn about the words and phrases used in auto policies. Know the many coverage options. Review the different benefits of each option. UNDERSTAND CONSUMER PROTECTIONS. As a New Jersey auto insurance consumer, you have rights. You have a right to fair and equal treatment, and you have the right to get the information you need .
Hampshire Insurance Department does not mandate or set Auto Insurance Rates. Auto Insurance Rates will vary by insurance company. This guide is intended to give New Hampshire consumers basic information on auto insurance. It suggests ways to: Lower the cost of your auto insurance, shop for Auto insurance and, file an auto insurance claim.
consumer guide to auto insurance contents introduction to auto insurance 1 understanding your auto insurance policy 2 required auto insurance 3 optional types of auto insurance 4-5 getting the right coverage 6 accidents and violations 7 how to shop for auto insurance 8 shopping tips 9 frequently asked questions 10-11 insurance complaints/when you have a problem 12
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