NJ Automobile Insurance Coverage Selection

Insure Yourself First

When purchasing New Jersey Automobile insurance, it is important to maximize your Medical Payment (Personal Injury Protection (PIP) coverage and Uninsured/Underinsured Motorist (UM/UIM) coverage to properly protect you and your family.


Automobile Accidents Happen More Than You Might Think

New Jersey is the most densely populated state in the United States and the eleventh most populated.  New Jersey drivers are all too familiar with the heavy traffic congestion on our highways and byways.  The high volume of cars and trucks sharing our roads inevitably leads to vehicle accidents. 

The New Jersey Department of Transportation (NJDOT) reports in its most current data, that during the five-year period 2015-2019:

  • Total crashes in the entire state – 1,365,096  
  • Total crashes that caused injuries – 244,482 or 22% of all crashes during this period caused a reported injury.
  • Total crashes that caused at least one fatality – 2,731

By automobile insurance industry estimates, the average driver will file a claim for a collision about once every 17.9 years. If you got your license at age 17, the odds are quite good that you will be involved in a crash by the time you are 35. Over the course of a lifetime, the statistics predict you will have a total of three to four accidents.



How Many Uninsured Drivers are in New Jersey?

When an automobile accident does occur in our state, there is good chance that one or more of the vehicles involved are uninsured.  About 14.9% of New Jersey drivers have no auto insurance, according to the Insurance Research Council. (Forbes  Oct 15, 2020)

An even higher percentage will have minimal liability coverage - the coverage designed to compensate you for injuries if the other driver is responsible for causing the accident.


When an Accident and Injury Occur

When injured in an accident, the first and most important concern of the injured party is getting immediate and appropriate medical care. Today, a trip to the emergency room for evaluation and diagnostic imaging studies to rule out life threatening injury can run well more than $10,000.  Admission to the hospital for accident injuries typically costs many times that. In this circumstance, adequate medical insurance coverage under the injured party’s own automobile insurance policy is essential.


If the other driver was responsible for causing the accident, the injured party may be entitled to compensation for the pain, suffering and disability they endure, as well compensation for loss of income and property damage to their vehicle.  But what if the other driver is uninsured, or if insured, has limited liability coverage that is inadequate to fairly compensate the injured party?   In these circumstances, the Uninsured /Underinsured Motorist coverage in the injured party’s own auto policy is designed to provide coverage. 



Automobile Insurance Coverage Selection

New Jersey motor vehicle owners continue to pay some of the highest insurance premiums in the country. Often the total cost of the insurance policy is what many buyers focus upon in making decisions about coverage limits. In general, the higher the limits, the higher the price.  However, purchasing the lowest limits for certain coverage types can be a very costly error.  We advise our clients to maximize the coverage that will most benefit them in the event they suffer serious personal injury in an automobile accident. When purchasing a standard NJ automobile insurance policy, we advise our clients to “Insure yourself first” by maximizing Medical Payment/Personal Injury Protection (PIP) coverage and Uninsured/Underinsured Motorist (UM/UIM) coverage to properly protect themselves and their families.


Personal Injury Protection (PIP)

 Insure Yourself First: Purchase the maximum $250,000 PIP coverage.

New Jersey is a No-Fault state which means your PIP (Personal Injury Protection) insurance coverage under your automobile policy pays for your own medical treatment following an accident, regardless of who is at fault for the accident.  Make sure to purchase the maximum coverage available, which is $250,000.

Under the standard NJ auto policy, buyers are given the option of making their health insurance primary, meaning if you are injured in an auto accident, regardless of fault, your health insurance company will pay benefits to your healthcare providers.  However, we strongly discourage our clients from selecting this option as there are significant problems posed by this arrangement.  Any benefits paid by the health carrier will be charged against the lifetime cap of the health policy, which will limit the coverage available to you in the future.  In addition, if you receive a settlement for the injuries suffered in the automobile accident, most health insurance policies provide for the full repayment of the money they paid out for your medical bills from your portion of the settlement, which will reduce the net recovery for your injuries, perhaps to zero. Note that automobile insurance PIP benefits are not subject to reimbursement from amounts recovered for personal injury.  

It is important to obtain PIP coverage in the amount of $250,000 to cover auto related medical expenses. PIP benefits also include other types of No-Fault coverage as well, such as payments for a portion of any lost wages and essential services such as housekeeping which you may require as you heal and recover from your injuries.


Uninsured and Underinsured Motorist Insurance

Insure Yourself First: Purchase a minimum of $100,000 Of UM/UIM coverage, more if your budget permits.

Uninsured and Underinsured Motorist coverage is extremely important when you are involved in an accident with another driver who either does not have an auto insurance policy (uninsured) or does not have an auto insurance policy with limits that can sufficiently compensate for the costs associated with the extent of your injuries (underinsured).

If you suffer damages because of an accident, it is important to protect yourself against negligent drivers with little or no insurance coverage. Without the proper insurance coverage, you may find yourself with no way to receive compensation for losses you suffer. Imagine being struck by a driver that flees the scene or has no automobile liability insurance. Imagine being struck by a driver that has limited insurance ($15,000 minimum in New Jersey).

If any of these circumstances occur, it is important that you have adequate insurance coverage to protect yourself.  Auto insurance policies in New Jersey have Uninsured/Underinsured Motorist (UM/UIM) coverage which covers you if you suffer damages because of a driver with little or no insurance.  The amount of coverage for UM/UIM coverage should always be in the same amount coverage you select for your liability coverage. We encourage our clients to purchase no less than $100,000 in UM/UIM and liability coverage, more if your budget permits.


In this article, we have discussed how to select coverage options to best insure yourself with respect to two important automobile insurance coverage types, PIP and UM/UIM. If you have a question about any auto insurance coverage options, or have been injured in a motor vehicle accident, please call our office and one of our personal injury trial attorneys will assist.