What is Car Insurance in NJ and How Does It Work

Car insurance is an agreement between you and your insurance company that involves the transfer of risk. In exchange for your payment, the carrier takes on the risk you represent and are exposed to as a driver. In other words, you’re transferring a significant amount of risk to the insurance carrier in exchange for a monthly, quarterly, or annual payment. Sound like a good deal? It is.

The National Safety Council released a report showing that the average cost of property damage resulting from car accidents was over $9,000. Crashes with more severe outcomes resulting in bodily injury had an average of $80,700 per accident! When you ask yourself, “what is car insurance?” you can know that it is paying a modest premium to be able to transfer that risk to your insurance company. That should make you breathe a little easier. Let’s consider the basic components of car insurance, and how each relates to public safety for motorists in New Jersey.  

Who is covered by car insurance?

Car insurance provides limited coverages to repair and replace damage to material objects that belong to you and other people. However, the most important aspect of what car insurance can do for you is the fact that it provides financial protection for you and your family.  

What does car insurance provide?

According to the National Highway Traffic Safety Administration, there are more than six million vehicle accidents in the United States every year. If you happen to be involved in one of them, you’ll be glad to know that you’re protected. Most car insurance policies will provide coverage to repair or replace damaged property. 

If you’re physically injured in an auto accident, your insurance carrier will provide coverage for your medical costs. If you’re at fault in a car accident that results in severe bodily harm, your policy may provide you with additional benefits, such as protection against a lawsuit and legal fees as well. Of course, the amount of coverage provided depends on the limits you have selected.         

When does car insurance pay?

Every car insurance policy is different; however, in most circumstances your car insurance policy will provide coverage for damage to others and their property when you’re at fault in a traffic accident. Depending on the type of coverage you have in your policy, there may also be coverage for other causes of damage to your vehicle, such as vandalismtheft or hail.     

Where should you buy car insurance?

There are many choices out there when you consider your insurance options. Deciding which insurance carrier you buy your coverage from is a very important decision. Before you make that final decision, there are a few key things you’ll want to consider, such as carrier experience, outstanding service, affinity programs, rewards programs, discount programs and flexible policies customized to meet your specific needs.    

Why is car insurance required?

Who you buy your car insurance from is optional; but as a driver in New Jersey, car insurance itself is not! While you might not agree with every law in New Jersey, the legal requirement for all drivers in the state (and almost every state) to have car insurance protects almost everyone from risk. The financial chaos that would likely result from not mandating car insurance would be significant. 

According to the Federal Deposit Insurance Corp. (FDIC), the average American savings account contains $16,420. While that amount of money may be enough to cover a fender bender, it certainly wouldn’t come close to replacing a late model vehicle, or paying medical bills resulting from a severe traffic accident.           

More questions about NJ car insurance

If you have questions about car insurance coverage and how it can meet your specific needs, contact Plymouth Rock Assurance today to speak with a knowledgeable representative. They will be happy to assist you. 

Plymouth Rock has been insuring drivers in New Jersey for decades. That experience coupled with specialty group programs, like the Teachers’ Insurance Plan of NJ and special affinity programs for nurses, CPAs and others, makes Plymouth Rock the clear choice for your car insurance needs!       

Call 855-993-4470, get your free quote online, or find an agent to learn about what auto insurance is in NJ. If you need additional information it can be found on our Contact Us page.