Confusion and intimidation are two common feelings people get when they are faced with making decisions about their automobile insurance. People are always asking what type of cover­age they have or what type of cov­erage they need. Sometimes, after a person is involved in a motor vehicle accident, they simply do not know how to proceed in han­dling personal injury, lost wage or property damage claims. Below are some frequently asked ques­tions regarding car insurance.

Q Do I have to purchase motor vehicle insurance?

A The law in New Jersey requires that every owner of a registered automo­bile purchase and maintain insur­ance coverage on the automobile. Specifically, the law requires that automobile liability insurance be purchased. Liability insurance that you purchase will protect you and your loved ones and protect your assets. If you are caught driving without insurance, you may be subject to a large fine, have your driver’s license suspend­ed or even face jail time.

Q How much automobile insurance coverage can a person purchase?

A Under the law in New Jersey, an insurance com­pany is required to pro­vide a minimum amount of cov­erage in the amount of $15,000 per person and $30,000 per acci­dent. That is the bare minimum you must carry. The law in New Jersey also allows people to pur­chase additional liability insur­ance coverage up to $250,000 per person and $500,000 per accident or a $500,000 single limit liability policy. Remember that liability insurance is meant to protect you and your assets. The more liability coverage you have, the more security you have. If you do not have proper insurance, you may be personally responsible for any damage resulting from an accident.

Q My automobile insurance company sent some documents with terms I am not familiar with: Tort Threshold and PIP coverage. What do they mean?

A Tort Threshold. The “tort threshold” or “limi­tation on lawsuit option” on your insurance policy requires certain injuries, such as death, significant disfigurement or scar­ring in order to maintain a claim for damages. This limitation may also affect other family members who reside with you. Instead of the “limitation on lawsuit option,” you may purchase a “no limitation on lawsuit option.” In that case, you may file a claim for any injury that you suffered as the result of a motor vehicle accident. Even if you have the limitation on lawsuit option now you can change it at any time by contacting your insurance agent. Although the “no limitation on lawsuit option” is more expensive, it enhances your coverage and removed barriers to collecting damages for injuries caused by the other driver.

PIP Coverage

Personal injury protection cover­age (“PIP”) provides benefits to a person for their automobile accident related medical expenses. This is sometimes referred to as “no fault” benefits, as it pro­vides coverage for your medical expenses, regardless of fault. The standard amount of coverage for the payment of medical expenses is $250,000 per person per acci­dent. In addition to paying for medical expenses, PIP coverage provides loss of income benefits as well as essential service benefits. The standard policy provides loss of income benefits in the amount of $100 per week, but in order to protect yourself with income continuation benefits; you can increase the amount of benefits up to the maximum allowed which is $700 per week. Essential service benefits reim­burse the injured person as well as his family members who rely on him for essential services for the cost of hiring replacement ser­vices. Death benefits and funeral expense benefits are also available under PIP coverage.

Q My automobile policy indicates that I have uninsured and underinsured motorist coverage. How do these benefits work?

A Unfortunately, not all drivers follow the law in New Jersey and some do not carry liability insurance. These persons are known as uninsured motorists. When you have unin­sured motorist coverage, you can be compensated for injuries that result from an accident with a driver who is legally responsible for the inju­ries, but has no liability coverage. Uninsured motorist coverage may also apply when you are injured in an accident with an unidentified hit-and-run vehicle.

Underinsured motorist coverage protects an injured party when the driver who is at fault does not have enough insurance coverage to fully compensate an injured party for his or her injuries. For example, if an at-fault driver only has $15,000 worth of liability insurance and the injured party is entitled to compensation in the amount of $100,000, the injured person may be able to collect from his own insurance company, up to an additional $85,000.

Q If I am injured in an accident, how much is my case worth?

A In New Jersey, there is no formula as to what the value is. Typically, there are many different elements that determine the value of a case. They include the following: pain and suffering, out-of-pocket expenses, future medical expenses, lost wages, future lost wages, loss of earning capacity, disability, impairment and loss of enjoy­ment of life.

Q What if my spouse was injured in an accident and cannot take care of certain things around the house, would I be entitled to compensation?

A Under the law in New Jersey, a spouse is entitled the services of his/her spouse in attending to household duties, to companionship and comfort and to consortium (mari­tal relations).

Q How do I properly pro­tect myself?

A Accidents happen when you least expect them to happen. Be prepared. Sooner, rather than later, sit down with your insurance agent or your attorney to make sure you have the proper coverage on your own motor vehicle. If, unfortunately, you have been involved in an accident, whether it is a motor vehicle accident or a fall down accident or even an accident while working, I will be happy to sit down and speak with you about your rights.

The information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.