Only Buy What You Need

Insurance companies have spent a great deal of money over the years marketing their product to you by offering you their best rates, but will the cheapest price really cover you when the unthinkable happens? Purchasing automobile insurance in New Jersey can be confusing and overwhelming and leave you wondering if you have the right coverage.   Insurance is not a one size fits all product and the advertised “best” deal might not be best one for you. As Your Neighbors and Your Lawyers, we are here to explain some of the different types of automobile insurance coverages that are available, in order to assist you in purchasing the insurance policy that is right for you.  As part of that process, we’ve compiled a quick reference guide of the different types of automobile insurance and the types of coverage that each provides.

Liability: If you are unfortunate enough to be involved in an at-fault accident, you can be sued. Liability insurance is there to compensate accident victims for the damage that you caused, while simultaneously protecting against claims they may bring against you.

Uninsured and Underinsured motorist (UM/UIM): While liability insurance compensates others for your negligent actions, uninsured and underinsured motorist coverages protect you from the negligent actions of others. Uninsured motorist coverage protects you if you are involved in an accident where the other driver either cannot be identified or otherwise has no liability insurance coverage. Underinsured motorist coverage protects you if the other driver does not have sufficient liability insurance coverage.  These coverages can be very important to have as they protect you from the actions of other people, often times at a fraction of the cost that insurance carriers charge for liability insurance.

Collision: This insurance covers you for the damage sustained by your car in an automobile accident, whether or not it was your fault.

Comprehensive: Comprehensive insurance covers damage to your vehicle sustained from outside forces, such as severe weather or an unusual event such as a tree falling.

Personal Injury Protection (PIP): New Jersey is a No-Fault insurance state.  That means that regardless of who caused your automobile accident, your accident-related medical expenses are normally paid by your own automobile insurance carrier.  Personal Injury Protection (P.I.P.) is the portion of your automobile insurance policy that pays those bills, as well as other benefits such as income continuation payments and essential services.  

Tort Threshold: When you purchase your automobile insurance policy, you are required to make a selection of a “tort threshold.”  Your tort threshold selection controls whether or not you have a restriction or limitation on your right to bring a claim against the other driver who caused your accident.  You must select either the Limitation on Lawsuit threshold or the No Limitation on Lawsuit threshold.  This may turn out to be the most important, and least understood, portion of your automobile insurance policy.  

The State of New Jersey requires that most drivers carry at least $35,000 in bodily Injury (B.I.) liability insurance coverage and $25,000 in property damage (P.D.) liability insurance coverage. Exceptions for “basic” insurance policies are available, but are more complicated and will not be discussed here.  A minimum of $15,000 in P.I.P. coverage is required, but higher amounts are available.  Other mandatory coverages include income continuation benefits; loss of essential services benefits; as well as $10,000 in death benefits.

These coverages are the bare minimum. What YOU need in order to make sure that you are properly covered in the event of an accident depends on your own personal circumstances.  Considerations may include things such as your financial situation, as well as what assets you have to protect. The more assets you have to protect, the more liability coverage you may want to consider purchasing.  UM/UIM coverage is only available up to the amount of liability coverage in your policy. It’s a wise move to purchase the maximum amount of liability coverage you can comfortably afford, while simultaneously buying an equal amount of UM/UIM coverage.

When it comes to collision coverage, the amount of coverage you need depends on the value of the car you own, considering its age and cost. If you wish to take a chance, you can choose not to purchase collision coverage, but you may not be entitled to compensation for your property damage if you caused the accident.  If you want collision coverage, you may be able to save money by purchasing it with a higher deductible amount. Oftentimes the insurance ads don’t tell you that your insurance policy should be customized to your individual needs.

Here at Levinson Axelrod, we recognize that people are different and so are their automobile insurance needs.  We are happy to discuss your individual automobile insurance needs, free of cost. Let us get to know you. Tell us what insurance coverage you have and what’s important to you. We will look at your situation and make recommendations that may  help keep you protected. Because protecting you is our business, we can offer suggestions to help you select the right automobile insurance policy.   Call us at (908)782-6766 for your free automobile insurance consultation. We look forward to helping you.

DISCLAIMER: We do not sell insurance, nor are we part of the insurance industry.  While we offer you our opinions as a personal injury law firm, this information should not be taken as a professional opinion on the topic of insurance.