Anyone driving a car must have at least the third party liability coverage which covers any damages caused to third party individuals, property and cars. While NJ insurance may be expensive, it is crucial for drivers to protect themselves. Never drive a car without insurance. If you are in an accident and have no insurance, you will quickly find yourself in serious financial and legal trouble.
The minimum legal insurance requirements vary from state to state, so be sure to visit your state’s Department of Motor Vehicles site to learn more. Keep in mind that the minimum requirements may satisfy state laws, but may not be suitable for your needs. That being said there are at least a 9 types of insurance for you to consider.
That’s right 9. Read this list and then talk to a professional auto insurance agent or reliable insurance company. You need to find out what insurance is right for you before you need it.
1. Liability Coverage
Pays out if you are in a car accident and the police decide it is your fault. Liability Insurance covers the cost of repairing any property damaged in the crash (such as cars or buildings), as well as the medical bills from resulting injuries. Liability policies are required by most state’s laws for all registered autos; however, the minimum required liability limits vary from state to state.
Do You Need This? Go beyond the state’s minimum requirement if you have a lot of assets to protect. The higher your personal assets, the higher your liability coverage should be. Talk to your agent or insurance company to get the answers which are right for you.
2. Collision Insurance
Pays out if your car is totaled in an accident. Collision Insurance covers the value equal to what your car was worth before the accident. Add if you drive an expensive vehicle. Subtract if your vehicle’s value is low and it is cheaper to dump it rather than fix it. Talk to your agent or insurance company to calculate cost of Collision Insurance policy vs. value of your vehicle. Also take a look at NJ Car Coupon for potential insurance deals for your next car.
Do You Need This? Add if you drive an expensive vehicle. Subtract if your vehicle’s value is low and it is cheaper to dump it rather than fix it. Talk to your agent or insurance company to calculate cost of Collision Insurance policy vs. value of your vehicle.
3. Comprehensive Insurance
Pays out if for damage from weather damage, theft, animal collision, shopping carts, or anything else. A Comprehensive Insurance policy will handle just about any situation that comes up.
Add or Subtract? Add if you drive an expensive vehicle. Talk to your agent or insurance company to calculate cost of policy vs. value of your vehicle.
4. Uninsured Motorist Protection
The Insurance Research Council, the estimated number of uninsured drivers can reach 25% in some states. An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements or whose insurance company denied their claim or was not financially able to pay it. Ask your agent or insurance what Uninsured Motorist Protection covers: accidents; hit and run; property damage; passengers, lost wages, etc.
The Uninsured Motorist Protection policy may cover your costs.
5. Medical / Personal-Injury Protection
Pays out for medical bills if you or your passengers are injured in an accident, no matter who is at fault.
Add or Subtract? Add if your health insurance policy isn’t strong.
6. Gap Insurance in NJ
Pays out what you owe the bank if your car is totaled, lost, or stolen. This is especially worthwhile if you owe more on the car than you could get for it if you sold it today.
Add or Subtract? Must add if you’re leasing. Subtract if you own a cheap car.
7. Credit Life Insurance
Pays out the loan balance on your car if you die before you car loan is paid off.
Add or Subtract? Here is where you need to get your life insurance and auto insurance agents on the phone at the same time. Get them to tell you how your policies work.
8. Disability Insurance
Pays out if you cannot work because of a disabling accident. Find out if your Disability Insurance makes your car payments.
Add or Subtract? Talk to your financial advisor or accountant.
9. No-Fault Insurance in NJ
So far, no-fault insurance is available in thirteen states: Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
In most states, auto insurance functions under a traditional fault-based system. In a fault-based system insurance companies make payments based on each person’s degree of fault in a particular motor vehicle accident.
No-Fault Insurance covers injuries and property damage, no matter who is ultimately responsible for a given accident. The decision to choose no-fault insurance really depends on what other insurance options are available to you and at what price. Some no-fault policies can be expensive, making it more cost-effective to choose other options, especially if your car is inexpensive to replace.