Who should consider buying the New Jersey Basic Auto Insurance Policy?

The NJ Basic Automobile Insurance Policy should be considered by those with few family responsibilities and few real assets. It can provide a transition for younger drivers who are just beginning work, providing a basic, minimum protection when they may be least able to afford more comprehensive coverage.

If you do not have any liability coverage, you are responsible for paying for the pain, suffering and other personal hardships and some economic damages, such as lost wages, that you cause. The insurer will not provide or pay for a lawyer to represent you if you are sued. Your assets will be at risk, including the risk of having money deducted from your wages if a judgment is entered against you. And, if you lack coverage and someone hits you, you cannot sue.

Where can I purchase the New Jersey Basic Auto Insurance Policy? Get Quotes here

A Basic Auto Policy may be purchased through any New Jersey licensed insurance producer. New Jersey law exempts producers from liability on account of selling insurance with the minimum required coverage.

The chart below compares the differences between the NJ Standard and NJ Basic Auto Insurance policies and explains the amounts of coverage you may be able to purchase from an insurer in New Jersey.

Type of Coverage	NJ Basic Policy	NJ Standard Policy
Bodily Injury Liability (Coverage for claims and lawsuits by people injured as a result of an accident you cause)	Coverage is not included but $10,000 coverage for all persons, per accident is available as an option	Coverage of $15,000 per person, per accident and $30,000 for all persons, per accident, is provided but higher limits are available (limits available may vary by company)
Property Damage Liability (Coverage for claims and lawsuits by people whose property is damaged as a result of an accident you cause)	Coverage of $5,000 per accident is provided	Coverage of $5,000 per accident is provided but higher limits are available
Personal Injury Protection (Coverage for injuries sustained in an automobile accident by you or other persons covered under your policy)	Coverage of $15,000 per person, per accident and up to $250,000 for permanent or significant injury as defined in the policy	Coverage of $250,000 per person per accident unless a lower limit is selected However, up to $250,000 for permanent or significant injury as defined in the policy regardless of selected limit
Uninsured/Underinsured Motorist Coverage (Coverage pays for property damage or bodily injury if you are in an accident caused by an uninsured motorist (a driver who does not have the minimum level of insurance required by law) or a driver who is insured, but who has less coverage than your underinsured motorist coverage)	None	Coverage is available up to amounts selected for liability coverage
Collision (Coverage for damage to your vehicle as the result of a collision with another car or other object)	None*	Available as an option
Comprehensive Coverage for damage to your vehicle that is not a result of a collision, such as theft of your car, vandalism, flooding, fire or a broken windshield. Comprehensive coverage also pays if you collide with an animal.	None*	Available as an option

*Collision and comprehensive coverage are available as an option on policies issued through PAIP or on voluntary policies issued by some insurance companies. This is very important for anyone who has a vehicle loan or lease that requires physical damage coverage.

The Basic Policy was established pursuant to N.J.S.A. 39:6A-3.1 as a lower-cost

alternative to standard coverage for drivers for whom: a.) standard coverage may be cost

prohibitive; b.) standard coverage limits may be excessive given personal circumstances; or c.)

driving uninsured in violation of N.J.S.A. 39:6A-3 may be contemplated as an alternative to

standard coverage. To date, very few drivers for whom the Basic Policy appears suitable have

taken advantage of the option. The Department is concerned that the negligible number of Basic

Policies now in force (less than 0.22% of all policies in force) indicates that many drivers who

could consider the option have not done so because they and producers lack accurate

information. New Jersey has uninsured drivers who by driving uninsured

are putting themselves and others at substantial risk. Drivers who elect the Basic Policy as an

alternative to driving uninsured benefit both themselves and the general public. The following

provides accurate information about the Basic Policy process for producers, applicants and

prospective applicants.

1. Any owner of an automobile registered or principally garaged in New Jersey may elect to

meet minimum mandatory insurance requirements with the Basic Policy. Owners of automobiles

requiring collision coverage because of lease or financing terms for the vehicle may elect to add

those coverages to the Basic Policy, with all unaffected coverages remaining as set forth in

N.J.S.A. 39:6A-3.1, in cases where the insurer offers such an option.

2. Insurers and producers in the voluntary market are required by law to offer coverage,

including but not limited to the Basic Policy, to any eligible person who asks for coverage,

except where the Department has exempted the insurer from eligible-persons requirements.

3. Drivers who elect the Basic Policy as an alternative to driving uninsured gain several

protections, as set forth in N.J.S.A. 39:6A-3.1, as well as a right to sue. Uninsured drivers do not

have a right to sue for damages relating to the operation of their vehicle.

4. A properly completed and executed coverage selection form, including all coverages

provided by the Basic Policy, is prima facie evidence of the insured's knowing election or

rejection of any coverage option.

5. N.J.S.A. 39:36A-23 immunizes insurers from liability for damages relating to the levels

of coverage elected or rejected by a driver in a properly completed and executed coverage

selection form. Furthermore, N.J.S.A. 17:28-1.9 specifically provides the same immunity for

producers.

6. All applicants and prospective applicants must be informed of the existence and terms of

the Basic Policy, and provided with the opportunity to select the policy.

What do you get in NJ Basic and NJ Standard Auto Insurance Policies?

Bodily Injury Liability (Coverage for claims by people injured as a result of an accident you cause)

Basic Policy: Coverage is not included but $10,000 coverage for all persons, per accident, is available as an option.

Standard Policy: Coverage of $15,000 per person, per accident and $30,000 for all persons, per accident, is provided but higher limits are available.

Property Damage Liability (Coverage for claims by people whose property is damaged as a result of an accident you cause)

Basic Policy: Coverage of $5,000 per accident is provided.

Standard Policy: Coverage of $5,000 per accident is provided but higher limits are available.

Personal Injury Protection (Coverage for injuries sustained in an automobile accident by you or other persons covered under your policy)

Basic Policy: Coverage of $15,000 per person, per accident, and up to $250,000 for permanent or significant injury as defined in the policy.

Standard Policy: Coverage of $250,000 per person, per accident, unless a lower limit is selected. However, up to $250,000 for permanent or significant injury as defined in the policy regardless of selected limit.

Uninsured/Underinsured Motorist Coverage (Coverage protects you if you are in an accident with someone who does not have the minimum coverage required by law or is insured with limits less than your uninsured motorist limits)

Basic Policy: None

Standard Policy: Coverage is available in amounts similar to liability coverage.

Collision (Coverage for damage to your automobile from striking another vehicle or fixed object)

Basic Policy: Available as an option

Standard Policy: Available as an option

Comprehensive (Coverage for damage to your automobile caused by other than a collision)

Basic Policy: Available as an option

Standard Policy: Available as an option

New Jersey Basic Auto Insurance Policy