(Newswire.net — May 26, 2020) — Auto liability insurance is mandatory in New Jersey. Liability insurance generally covers the other driver’s bodily injuries and property damage when the policyholder is at-fault for an accident. This includes the other driver’s medical expenses, property damage, and other expenses and losses.
New Jersey requires every “standard” auto liability insurance policy to include bodily injury limits of $15,000 per person and $30,000 per accident. Furthermore, every “standard” auto liability policy must include uninsured/underinsured (UM/UIM) coverage up to $250/500,000 split limits or $500,000 single limits (not to exceed the liability limits).
What is Uninsured/Underinsured Motorist Coverage?
UM coverage pays policyholders when another driver is at fault for the accident and has NO auto liability insurance. UIM coverage pays a policyholder when the at-fault driver does not have enough auto liability insurance.
UM/UIM coverage comes into play in New Jersey if you were injured in an accident caused by someone who has NO liability insurance or does not have enough liability insurance to cover your injuries and losses. When this happens your own liability insurance policy, which contains UM/UIM coverage, will pay for your injuries and losses.
For example, if someone else injures you, they are at fault and they have NO liability insurance, you will then serve a complaint on your own insurance company so that they are aware that they may have to potentially pay an uninsured motorist coverage claim to cover your medical bills, lost wages, pain and suffering, property damage and the like, up to your coverage limits.
Similarly, let’s suppose that Mr. Smith causes an automobile accident and you are injured. You have $15,000 in medical expenses and your pain and suffering is worth another $15,000. Your total bodily injury claim is thus worth $30,000. Suppose further that Mr. Smith only has $20,000 in insurance coverage.
In that case, Mr. Smith’s insurance company would pay you $20,000 and your insurance company would pay you $10,000 from your underinsured motorist coverage, assuming you have purchased it and your limits are at least $10,000 (the difference between your claim and Mr. Smith’s policy limits).
Other Things to Keep in Mind:
- UIM coverage is designed to pay when the at-fault driver does not have enough insurance to pay your claim, so logically it ONLY kicks in if the at-fault driver’s policy has paid its maximum and it was not enough to pay the full value of your claim.
- You can only buy as much UM/UIM coverage to equal the amount of liability insurance you have purchased. Therefore, you need to consider this when choosing your liability insurance amount. We recommend purchasing at least $300,000 in liability insurance so that you can insure yourself with that same amount of UM/UIM coverage as well.
- When purchasing auto insurance in New Jersey, you should make sure to list all members of your household that have driver’s licenses and all of your designated drivers as well. This should also include children who are just getting their permits. Furthermore, even if you are lending a car to a family member for an extended period of time, list them as a designated driver. If you don’t, they may not be covered under your policy.
- If you own any car that is registered in New Jersey, it must be insured. If you fail to list a car that you own your auto insurance policy, the insurance company can exclude UM/UIM coverage for bodily injury sustained while operating that car (the “owned-motor vehicle exclusion”) and you will be denied medical benefits no matter how serious your injuries may be. You must, therefore, make sure that you list all potential drivers, as well as, all cars you own on your insurance policy.
Contact an Experienced New Jersey Car Accident Lawyer
An experienced car accident lawyer can help you recover full and fair compensation from your New Jersey uninsured/underinsured motorist coverage. If you were injured in a car accident caused by an uninsured or underinsured driver, call our law firm, or visit our contact page to arrange a free consultation with an experienced New Jersey car accident lawyer.