By Jennilee Bruynell
•
17 Dec, 2019
Buying insurance can be difficult when you don’t understand all of the insurance terms and what the different coverages mean. Read this handy article to understand the basics of auto insurance! What is Liability Coverage? Liability coverage protects you from financial losses from an accident that you (or someone driving your car) may have caused. Auto insurance Liability is separated into two categories, 1. Bodily Injury Liability -this covers costs associated with injuries and death that you or another driver causes while driving your car. 2. Property Damage Liability — This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole. - Another term you may hear is Un/Underinsured Coverage - This reimburses you when an accident is caused by an uninsured or underinsured motorist—or in the case of a hit-and-run. New Jersey State Minimums for a standard policy are $15,000 Per Person and $30,000 Per Accident for bodily Injury Coverage and $5,000 for property damage. However, I often recommend seeking higher limits of liability in order to protect yourself and your assests in the event of an accident. Another coverage required by New Jersey mandatory insurance laws is Personal Injury Protection (PIP)- this provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses. PIP has a coverage limit and a deductible. The NJ Limit is $15,000 with a $2,5000 deductible. Now lets discuss Full Coverage, because it may not mean what you think it does! Full coverage does not mean having high limits of liability, as many think it does. In fact, you can have standard state minimum coverage and still have full coverage. How is this possible? Well because having full coverage means that you have Comprehensive and Collision coverage. So, what does this mean? Basically, Comprehensive and Collision coverage protect only your vehicle if it were to be damaged , Collision Covers if it is damaged in an accident, and Comprehensive covers if it is damaged in another way, like a lightening strike, flood, or vandalism. In order to use your comprehensive and collision coverage, you must first pay your deductible. A deductible is the amount of money you pay to fix your car and then the insurance company pays the rest. Deductibles range generally from $250 to $2,000. Usually, the higher the deductible, the lower the premium because you will be bearing more of the risk. An example would be if your car is hit and it will cost $2,000 to replace it. If your deductible is $500, then your insurance company will pay $1,500, but if your deductible was $1,000 then you would pay $1,000 and your insurance company will also pay $1,000. Who is covered—and when? Your auto policy will cover you and other family members on your policy, whether driving your insured car or someone else’s car with permission. Your policy also provides coverage if someone not on your policy is driving your car with your consent. Your personal auto policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. Your personal auto policy, however, will not provide coverage if you use your car for commercial purposes—for instance, if you deliver pizzas or operate a delivery service. Note, too, that personal auto insurance will generally not provide coverage if you use your car to provide transportation to others through a ride-sharing service such as Uber or Lyft. Some auto insurers, however, are now offering supplemental insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services. Looking for more info or a quote? Call our office at 856-256-1033. We would love to hear from you!