What is a Basic Auto Insurance Policy?

According to the State of New Jersey Department of Banking and Insurance, auto insurance is mandatory. and It is breaking the law to drive uninsured. Breaking this law can result in fines, suspension of driver’s license or registration, having your car impounded, and even time in jail. This means you have to have auto insurance if you are a driver in New Jersey.

Since the state of New Jersey has legislated auto insurance as a requirement, they have defined a minimum amount of insurance coverage that must be carried.  The Basic Auto Insurance Policy was created to protect New Jersey drivers and reduce the cost of insurance making it easily available to everyone.

The Basic Policy provides coverage for property damage done to others, which covers claims and lawsuits by people whose property is damaged as a result of an auto accident you cause. The Basic policy provides $5,000 per accident, which is the state’s minimum requirement. The other coverage is Personal Injury Protection.  This provides coverage for injuries sustained in an automobile accident by you or other people covered under your policy. The limit is $15,000 per person per accident is provided in a Basic Policy and up to $250,000 for certain injuries.

You can add coverage to your basic policy such as $10,000 for bodily injury liability which is for claims and lawsuits by people injured as a result of an auto accident you cause. There are also options for comprehensive coverage (coverage for when your vehicle is damaged by theft, vandalism, flooding, fire, hitting a deer or other large animal or broken glass) and collision coverage (coverage for when your vehicle is damaged by hitting another vehicle or stationary object).  Adding coverage will increase the price so if you are looking for a more complete policy, you might be interested in a Standard Auto Policy.

A Basic Auto Insurance Policy does not provide much protection for you or your assets if a serious situation occurs.  It costs significantly less than a Standard Policy because it has limited benefits.   The NJ Department of Banking and Insurance website says that “the Basic Policy could be an option for those with few family responsibilities and few assets to protect including income from a job.”

Obtaining a Basic Auto Policy may not be easy, as many producers lack accurate knowledge of these products. However, this policy is the next best alternative to driving uninsured.  Uninsured drivers have no right to sue for any reason after an accident and can face penalties by law.

No matter the situation, if you want to drive in New Jersey you need to have insurance.  Be sure to have your documents in the car with you and know what numbers to call in case of an emergency.  For more information about auto insurance in New Jersey, please contact us at any time.