Do You Know What is Covered in Your Auto Insurance Policy?

Posted on behalf of Lynch Law Firm on Dec 08, 2021  in Car Accidents News

Signing insurance paperworkNew Jersey requires every driver to carry motor vehicle insurance in case of an accident. To comply with the law, motorists purchase a policy advised by a licensed agent who they hope will help save them money. But not many people take a good look at the type of coverage they have until they need to use it.

It is important to understand the benefits of your insurance policy, as it may help you pursue compensation for simple things like lost wages or more complex things like pain and suffering.

Below, we discuss the policies and coverage types that may be available to you and how they may benefit you in different accident scenarios.

Basic vs Standard Insurance Policies

Due to high costs of auto insurance, motorists have the option to choose between a basic or standard insurance policy in New Jersey.

Unlike other states, which have a single set of insurance minimum requirements, New Jersey has two, and the minimum requirements offered depend on the type of policy you are purchasing.

Basic Policy Coverage

The minimum insurance offered for a basic policy is as follows:

  • $5,000 property damage liability per accident
  • $15,000 personal injury protection per person/accident

Some other options that are available under a basic policy, but are not required as part of the minimum coverage, include:

  • $10,000 bodily injury liability per accident
  • Comprehensive/collision coverage available as an option from some insurers

Uninsured/underinsured motorist coverage is not available to basic policyholders.

Standard Policy Coverage

For motorists who choose to purchase a standard insurance policy, the minimum insurance offered includes:

  • Bodily injury liability - a minimum of $15,000/person and $30,000/accident or up to a maximum of $250,000/person and $500,000/accident
  • Property damage liability – a minimum of $5,000 per accident or up to $100,000 or more
  • Personal injury protection – a minimum of $15,000 per person/accident or as high as $250,000 or more
  • Uninsured/underinsured motorist coverage – offered up to the liability limits of your selected policy, but may be rejected in writing by the policyholder
  • Comprehensive/collision coverage – available as an option by all insurers offering coverage

The type of insurance policy you choose may affect how much you may be able to recover in compensation if you are injured in a crash.

Understanding Your Personal Injury Protection Benefits

Since New Jersey is a no-fault state, one of the most important insurance policies to have is personal injury protection (PIP). This type of insurance covers a range of economic damages, no matter who caused the crash.

What Does PIP Insurance Cover?

It is common knowledge that PIP covers your medical expenses after an accident, but did you know you may also be eligible to recover compensation for things like:

  • Oral/optical care
  • Long-term care services
  • Lost wages/income/earning capacity
  • Funeral and burial costs
  • Essential services
  • Death benefits for dependents

Who is Covered by PIP Insurance?

PIP insurance covers you, passengers in your vehicle at the time of the crash and other members of your household when they are traveling as passengers in another vehicle not associated with your policy.

In some circumstances, PIP may even cover you or members of your household if you are involved in a pedestrian or bicycle accident.

Is There a Maximum Limit for PIP Benefits?

Just like other insurance limits, the maximum payout of PIP benefits depends on how much insurance is available.

Standard policyholders may choose to purchase over $250,000. Basic policyholders only have $15,000 available, except in cases of certain injuries where a basic policy would cover damages up to $250,000.

What if My PIP Benefits Are Maxed Out?

If the cost of damages exceeds your PIP limits, you may be able to pursue compensation from the liability insurance of a negligent driver.

While the liability insurance company is legally obligated to investigate every claim, they also have the right to defend against those claims and are under no obligation to offer a settlement, although most will if there is a strong case for compensation.

How Your Right to Sue is Affected by Insurance Types

If the liable insurance company is refusing to offer a settlement, you may have to file a lawsuit to recover the compensation you need. But this also can get complicated when it comes to New Jersey tort laws, which cover personal injury claims.

Drivers who purchase a basic insurance policy have a very limited right to file a lawsuit to recover compensation for pain and suffering. Unless, however, he or she suffered a certain type of injury.

Under the standard policy, drivers may choose between a limited and unlimited right to sue.

Other Types of Coverage That May Help You After a Crash

When you purchase a standard insurance policy there are additional coverage options to choose from that may help you after an accident. Some of those add-ons include things like:

  • Rental car coverage – If the negligent driver does not have liability insurance, having rental reimbursement on your policy may help cover the costs of renting a car when yours is undergoing repairs.
  • Gap coverage – Also known as guaranteed auto protection, this covers the “gap” between the market value of your vehicle and the amount you still owe on a loan or lease.
  • Roadside assistance – If your vehicle must be towed from the scene of a crash, having roadside assistance may help cover the cost of hiring a tow truck.

Call Today to Schedule a Free Consultation

If you were injured in a crash that was not your fault, it may be in your best interest to discuss your situation with a licensed attorney who can review your insurance coverage and the insurance policy of the at-fault driver to see what legal options may be available to you.

Our knowledgeable auto collision lawyers in New Jersey are prepared to help you understand your options and file a claim to pursue the compensation you need.

Call (800) 518-0508 to schedule a free consultation. 

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