This list is a summary of items to consider when purchasing or renewing automobile insurance in New Jersey
The Coverages: There are 5 types of coverages
1. Personal Injury Protection (PIP) - This is the coverage that pays the doctors if you are injured in an accident. PIP pays your medical bills even if you caused the accident (sometimes called "No Fault"). 2. Liability - This covers damages suffered by others in accidents you cause, and also provides for a lawyer to defend you if you are sued. Liability coverage includes both bodily injury and property damage. 3. Uninsured Motorist Coverage (UM) - This pays you for property or bodily injuries if you are injured in an accident caused by someone without insurance. 4. Underinsured Motorist Coverage (UIM) - This pays you for property or bodily injuries that you suffer in an accident caused by an insured driver that has less coverage than your UIM coverage. For example, if you purchase $250,000 in UIM insurance and are rear ended and very seriously injured by a driver with only $50,000 in liability insurance, after you accept the $50,000 from the driver who hit you, then you will have $200,000 in your own UIM insurance available to you. 5. Collision - This pays for the damage to your car from the accident.
Two Types of Policies in New Jersey
Standard Policy - Provides lots of options on coverages and the opportunity to buy additional protection. Basic Policy - Provides just enough coverage to meet the legal minimum insurance coverage that allows you to drive. This provides no coverage for your assets, no coverage for medical treatment for any injuries you suffer in an accident, and no compensation that you may need if you are seriously injured. If you suffer one of the common back injuries seen in auto accidents, like a herniated disc, you will have difficulty finding a surgeon who will perform surgery if you have less than $100,000 in PIP (keep in mind, the MRIs, chiropractors, physical therapists, and pain management doctors will likely be the first line of treatment before any surgery).
Health Care Primary
Be very careful on this one. If you decide to use your own health insurance as your primary source of coverage for your medical treatment for an automobile accident, you can save money on your automobile insurance. Most insurance companies will not pay for medical treatment arising out of an automobile accidents, and Medicare and Medicaid cannot be used for the health care primary option. Sometimes insurance agents or people buying insurance online have selected the health care primary option without checking with their insurance company, or worse, when they are on Medicare or Medicaid. If this happens to you, and you suffer injuries in an accident, be prepared for mountains of medical bills and possibly personal bankruptcy.
This coverage is sold together and is available up to the amount of your liability coverage. Since most of the drivers on the road have no insurance or barely any insurance, purchasing the highest amounts of UM/UIM coverage is the best way to protect you and your loved ones in case you are injured.
The Right To Sue
If you select "No Limitation on Lawsuit Option", you can sue the person who caused the accident for pain and suffering for any injury. If you select, "Limitation on Lawsuit" then you agree to not sue the person who caused the accident for pain and suffering unless you lose a body part, have disfigurement or significant scarring, suffer a lost fetus, displaced fracture, permanent injury, or death. Most of the controversy comes from individuals who select "Limitation on Lawsuit" and then sue for a permanent injury. Without fail, even if you present an MRI that shows a herniated disc or you suffer from a traumatic brain injury, the insurance companies will find a physician who will write a report that says that your injury is not permanent. The most common defenses raised by the defendants are that your herniated disc or bulge is a result of degeneration over time, not the car that slammed into you at 50 mph. They will often argue that even though your memory and your cognitive ability has diminished since you slammed your head during the accident, you have no objective proof that your brain is permanently injured so you can't recover. To prove a permanent injury, you will need to put forth objective medical proof certified by a physician that an injury is permanent.
Is it the Insurance of the Car in the Accident or the Insurance of the Person in the Accident?
If your after-school babysitter is driving her car and someone rear ends her, and your kids are injured, who's insurance pays for your children's medical bills? The primary insurance in this situation for payment of medical bills would be the parents' automobile insurance policy. The parents' automobile insurance would also determine the right to file a lawsuit for pain and suffering. If your friend (who has his own insurance) borrows your car and crashes into someone else causing injuries in the accident, can you be sued? Yes, your liability insurance would be primary.
New Jersey Automobile Insurance Laws Often Defy Logic
Example No. 1: if you suffer an injury in an auto accident, you are better off getting hit by a truck than a car. If a commercial vehicle hits you from behind, and you selected the Limitation on Lawsuit Option, you can still sue for pain and suffering for any type of injury, whereas if you were hit by a car, you would be subjected to the "Limitation of Lawsuit" option you selected. Example Number 2: if you are a passenger in a car struck from behind, and you have no applicable automobile insurance, and you suffer back pain, and sprains and strains without a displaced fracture, you can sue the driver of the car that hit you for pain and suffering. However, if you actually purchased a basic insurance policy, you would not be able to sue because of the Limitation on Lawsuit option.
What happens if you are in an automobile accident while at work?
If you are in an automobile accident during work hours, you can file a workers' compensation claim and also sue the driver who caused the accident subject to the "Limitation of Lawsuit" selection on your own automobile policy.
You Can Cancel or Change Your Policy
You have the right to cancel or change your coverages and policy limits at any time, even if you are not near your renewal date. If you make changes or cancel, you have a right to receive a refund of unused premiums. Changes are not retroactive.
Speak to An Experienced Automobile Accident Attorney
Most attorneys that represent victims of automobile accidents welcome the opportunity to help individuals understand their insurance policies before they are in an accident. Very often, attorneys only look at the insurance policy after the accident and are forced to advise clients that they don't have enough medical coverage to get treatment and cannot file a lawsuit for their injuries.
Additional resources provided by the author
New Jersey Association For Justice provides helpful information about Auto Insurance on the website - www.njconsumerlaw.com.
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