heroimage_njturnpike_autoinsurance.jpg

How Much Car Insurance Coverage Do I Need in New Jersey?

How do you know if you’re overpaying for car insurance coverage you don’t need? Or maybe worse: you need more coverage than you’ve actually purchased. Without at least a little bit of knowledge about the product you are buying, you may simply resort to the least expensive option by default. A licensed agent can walk you through coverage options and their potential value to you, individually. But going into a discussion with an insurance professional with some basic knowledge to answer the question, “how much car insurance coverage do I need”, is a great way to set yourself up for success. 

So let’s get started. In order to legally operate a vehicle in the state of New Jersey, you are required to maintain minimum limits of liability insurance coverage, but understanding what you need beyond the mandated requirements can sometimes get a little tricky. You understand the general importance of car insurance and why you have it, but making heads or tails of limits and deductibles on a range of potential coverages takes a little more work.  

Required Car Insurance Coverage in New Jersey

The minimum required car insurance for a standard auto policy in New Jersey requires four lines of coverage:

1)     Property Damage Liability: minimum limit of $5,000 per accident covers damage to others’ property resulting from an accident that you cause. Examples include damage to another person’s car or fence.

2)     Personal Injury Protection (PIP): $15,000 coverage, per person, per accident. This line of coverage pays toward the cost of medical bills if you or others covered on your policy are physically injured in an auto accident. This insurance is sometimes referred to as “no fault” coverage because it will pay medical costs regardless of who was at fault in the accident. The limit can reach as high as $250,000 if there are certain types of severe injuries regardless of the stated PIP limit in the policy.

3)     Uninsured Motorists Coverage: $15,000 per person, $30,000 per accident. This line of insurance will protect you in the event that you are in an accident with another person who does not carry the legally required auto insurance (uninsured). Underinsured Motorists coverage, while not mandatory, is generally offered together with Uninsured Motorist coverage. Underinsured Motorist coverage will protect you in the event that you are in an accident with another person who doesn’t have adequate limits to cover the cost of damage or injury that was caused. According to a recent study by the Insurance Research Council, New Jersey ranks 14th in the nation for uninsured motorists, with an estimated 14.9% of NJ drivers operating a vehicle without coverage.   

4)     Bodily Injury Liability: $15,000 per person, $30,000 per accident. This coverage protects you when you are at fault for an accident and the injured driver brings a claim or lawsuit against you for their injuries.

Although it’s not mandated by the state, you will most likely be required to carry extended lines of coverage such as comprehensive and collision if you’re leasing a car from a dealership, or you’ve financed the purchase of your vehicle through a financial institution.

Car Insurance Policy Options: From Minimum to “Maximum” Coverage and Everything in Between

As with other consumer choices, you will have the option to select, in a manner of speaking, the “economy” option, the middle of the road option and the premium, gold standard option. If you were to think of car insurance in terms of automobile shopping, you’d have choices ranging from a Ford Pinto, to a Honda Accord, up to a fully loaded Mercedes Benz. Take these hypothetical scenarios, for example:

 Scenario 1: Minimum Car Insurance

Although you want to be a legal driver, you live on a very tight budget and can’t afford the extra coverage beyond the bare minimum car insurance coverage. Your policy consists of personal injury protection and liability protection for injuries and property damage, and uninsured/underinsured coverage. Your policy looks like the following:

Property Damage Liability: $5,000 limit per accident.

Personal Injury Protection: $15,000 per person, per accident.

Bodily Injury Liability: $30,000 per person, per accident.

Uninsured/Underinsured Motorists Coverage: $15,000 per person/$30,000 per accident/$5,000 Property Damage.

 

Scenario 2: Standard Car Insurance

You have a budget mindset, but you will spend a little extra to get good quality and value. As a consumer, you make wise decisions. It’s no different when it comes to protecting yourself and your family on the road. Your car insurance policy consists of “standard” coverage and looks like this: 

Bodily Injury Liability: $50,000/person, $100,000/accident. These limits can range up to $250/500K.

Property Damage Liability: $50,000 per accident with limit as high as $100,000, or more.

Personal Injury Protection: $100,000 per person or per accident. The limit can be as high as $250,000 or more, with coverage limits up to $250,000 for particular injuries regardless of the selected limit.

Comprehensive Insurance: The amount of coverage is based on the cost to repair or replace the vehicle, not to exceed the actual cash value of the vehicle at the time of the loss.

Collision Insurance: The amount of coverage is based on the cost to repair or replace the vehicle, not to exceed the actual cash value of the vehicle at the time of the loss.    

Scenario 3: The “Ultra Preferred” Car Insurance Policy

You have an eye for the finer things in life, and you opt for the very best. You want the maximum amount of car insurance protection available. In addition to the required liability limits and comprehensive and collision lines of coverage, you opt to carry full tort coverage, GAP insurance and a personal umbrella that extends the limits on all liability lines. Your car insurance policy looks like the following:

Bodily Injury Liability: $250,000 per person, $500,000 per accident.

Property Damage Liability: $100,000 limit per accident.

Personal Injury Protection: $250,000 per person, per accident.

Uninsured/Underinsured Motorists Coverage: $250,000 per person, $500,000 per accident.

Comprehensive Insurance: Based on the value of the vehicle at the time of the loss.

Collision Insurance: Based on the value of the vehicle at the time of the loss.

GAP Insurance: Amount of the outstanding loan or lease of the vehicle at the time of the loss.

Full Tort Coverage: Can pursue a pain and suffering claim as a result of an injury caused by another driver in an auto accident.

Personal Umbrella: $5,000,000 additional liability limit.   

Most car insurance carriers also offer variations of policy options, which may also include coverage for glass, towing service and rental coverage. In many cases the type of car insurance coverage you need hinges on your financial situation – the assets you want to protect, and how much money you are comfortable spending on insurance, as well as the type of car you’re driving, and where you drive. If you have questions about a line of coverage, or limit, be sure to get your questions answered by a competent insurance professional that understands your risk exposure and your individual situation.  

Shopping for Car Insurance

If you feel that you’re either over-insured or underinsured, it may be time to consider other options. Consulting an experienced, licensed professional is very important. Get expert advice and service with Plymouth Rock Assurance. Plymouth Rock has insured New Jersey drivers for over 35 years and understands your coverage needs. Call today to speak with a representative and receive a complimentary review of your current car insurance coverages.   

Plymouth Rock Assurance and Plymouth Rock are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. Insurance in New Jersey is underwritten by Palisades Insurance Company and its affiliates. Each company is a separate legal entity that is financially responsible only for its own insurance products. Actual coverage is subject to the language of the policies as issued by each separate company.

Call 855-993-4470, get your free quote online or find a local agent to see how Plymouth Rock Assurance can help you know how much car insurance you need in NJ. If you need additional information, please visit our Contact Us page.