Q. What is the basic policy?
A. The basic policy (also known as the mini-policy) provides only $5,000 of property damage liability coverage if someone makes a claim against you and $15,000 of medical expense benefits (up to $250,000 for catastrophic brain and spinal cord injuries) if you or a resident family member are injured. The basic policy does not provide coverage if you injure someone else, however, you have the option of electing coverage in the amount of $10,000 for injury to one or more persons in the same accident if someone makes a claim against you. The basic policy does not provide any uninsured motorist coverage to protect you and your family if the careless driver who causes the accident is uninsured or is insured under a basic policy with no bodily injury liability coverage.
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Q. If I elect the basic policy, will my insurance company hire an attorney to defend me if I am sued for damages by someone else who was injured?
A. If you elect a basic policy with no bodily injury liability coverage, your insurance company will not provide an attorney to represent you. If you are sued -- even if you are not at fault for the accident -- you will have to hire your own lawyer at great expense to defend you or else you will risk the entry of a default judgement against you with the loss of your driver's license.
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Q. What is the standard policy?
A. The standard policy provides ability coverage if someone makes a claim against you with minimum limits for bodily injury of $15,000 per person/ $30,000 per accident and property damage of $5,000. In addition, the standard policy provides uninsured motorist coverage with minimum limits of $15,000 per person/ $30,000 per accident if you or a resident member of your family is injured by a person who is uninsured or has no bodily injury liability coverage. IT IS RECOMMENDED THAT YOU ELECT THE STANDARD POLICY
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Q. Does the standard policy provide coverage for medical expenses?
A. Yes. The standard policy provides personal injury protection (PIP) coverage which includes medical expenses up to $250,000 per person per accident. You may elect to purchase less coverage in the amounts of $15/50/75/150,000; however, if you do, you may not have enough insurance to obtain all of the medical treatment you need or to pay for all of your medical bills. IT IS RECOMMENDED THAT YOU PURCHASE $250,000 OF PIP MEDICAL EXPENSE COVERAGE.
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Q. If I am injured, can I make a claim or file a lawsuit against the careless driver who caused the accident?
A. It depends on your policy and the nature of your injuries. If you purchase a standard policy, you are required to elect a "tort option" that will determine if you have the right to make a claim. You must elect either the "limitation on lawsuit option" or the "no limitation on lawsuit option." If you purchase a basic policy, you are assigned the "limitation on lawsuit option."
Q. What is the "limitation on lawsuit option"?
A. The lawsuit limitation option (also known as the verbal threshold) limits your legal rights to make a claim for monetary damages or to file a lawsuit against a careless driver unless you sustain one of the following types of injury. Type 1 -- Death Type 2 -- Dismemberment Type 3 -- Significant disfigurement or scarring Type 4 -- Displaced fracture Type 5 -- Loss of a fetus Type 6 -- Permanent injury A permanent injury occurs when a body part has not and will not heal to function normally. IT IS RECOMMENDED THAT YOU DO NOT ELECT THE "LIMITATION ON LAWSUIT OPTION."
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Q. What is the "no limitation on lawsuit option"?
A. The no limitation option (also known as "no threshold") permits you to make a claim or to file a lawsuit against a careless driver for any and all personal injuries. IT IS RECOMMENDED THAT YOU ELECT THE "NO LIMITATION ON LAWSUIT OPTION."
Content courtesy of New Jersey Consumer Law:
