Why Do I Need Car Insurance in New Jersey?

As any New Jersey driver knows, it is mandatory to have car insurance in our state. In fact, failure to purchase a qualified car insurance policy can have criminal consequences. First offenders can expect a fine and some community service. Multiple offenders face harsher penalties such as larger fines, loss of driving privileges, or even jail time. While this blog is not about the criminal implications of the lack of car insurance, the penalties show how serious New Jersey is about car insurance. Basically, drivers need car insurance in New Jersey because it is the law. Why is this the law? Because insurance protects drivers and car accident victims. This is especially important in personal injury lawsuits. Without insurance, an accident victim would not be able to recover money to pay for medical bills, lost wages, and so forth.

Auto Policies Can Be Confusing

Sometimes I think that you need to be a lawyer or an insurance professional to understand an auto insurance policy. There are so many options, and it can be confusing to the novice. For example, New Jersey is a No-Fault state. This means that all drivers must have insurance that covers medical expenses, lost wages, or other care costs for their own, or dependents, injuries should they get hurt in a car accident. In this instance, it does not matter who is at fault for causing the accident. Another name for this type of no-fault coverage is Personal Injury Protection, aka PIP.

Next, drivers must pick between one of the following, also confusing, options:

1. Verbal Threshold or Tort Threshold. This is a less expensive coverage option. It is less expensive because choosing this coverage limits your ability to sue another party for certain injuries. Basically, with Verbal Threshold, you cannot sue for “pain and suffering” unless the injury results in death, dismemberment, significant disfigurement or scarring, displaced bone fractures, loss of a fetus, or another permanent injury. Without any of these injuries, you can only sue for economic damages such as medical expenses and loss of wages.
2. No Tort or No Lawsuit Threshold.  This option is more expensive. However, you can sue the negligent party for any time of injury and include claims for non-economic damages including pain and suffering.

Other Parts of an Auto Policy

• ·Liability. Liability coverage is to pay for damages from car accidents that you cause. There are two types of liability – bodily injury and property damage.
• Uninsured Motorist Coverage or Underinsured Motorist Coverage. This coverage covers damages from your own insurance company if the other driver does not have insurance or does not have enough insurance to pay your damages.
• Collision. Pays for damages to your vehicle as a result of a collision with another car or object – like a tree.
• Comprehensive. Pay for damage to your vehicle resulting from other events besides a collision. For example, your car gets stolen, damaged from a floor, or is vandalized.

Still Confused?

Hopefully, this information above provides a little more clarity about why you need car insurance in New Jersey. If it does not, call us and we can explain it to you in more detail. Also, you should call a lawyer as soon as you possibly can if you have been injured in a car accident. The right lawyer will be able to tell you what is in your policy and what is not. They will also be able to effectively deal with the insurance company and other parties. At the end of the day, the lawyer should have solutions to protect you and your family.