New Jersey Auto Insurance Buyer's Guide
M-592 (12-22) Page 1 of 10
NEW JERSEY
AUTO
INSURANCE
BUYER'S GUIDE
GEICO
Policy No.:
New Jersey Auto Insurance Buyer's Guide
Page 2 of 10M-592 (12-22)
WHAT'S INSIDE
Types of Coverages
Standard and Basic Policies
What are Limits and Deductibles?
Personal Injury Protection (PIP)
Uninsured/Underinsured Motorist Coverage
Comprehensive Coverage/Collision Coverage
The Right to Sue
WHERE DO I START?
UNDERSTANDING YOUR POLICY
UNDERSTANDING YOUR OPTIONS
POLICY OPTIONS CHART
WHERE TO GET MORE INFORMATION AND HELP
PAGE 3
PAGES 3 - 6
PAGES 6 - 8
PAGE 9
PAGE 10
Policy No.:
New Jersey Auto Insurance Buyer's Guide
M-592 (12-22) Page 3 of 10
WHERE DO I START?
Car insurance is required in New Jersey. Whether you are buying a new insurance policy or renewing your current policy,
you must make many decisions about what coverage you need and how much you can pay. The following guide outlines
how to make choices that work for you.
*
You can shop for auto insurance at any time -- not just when your policy is up for renewal, and if you find a better
price, you can cancel your old policy and seek a refund of your unused premium.
*
You have the right to change your coverages and policy limits at any time, even if you are not near your renewal date.
If you select options that save you money, you have a right to a refund of your unused premium within 60 days.
UNDERSTANDING YOUR POLICY
Types of Coverages
UNDERSTAND YOUR NEEDS. Do you rent or own your own home? Do you have assets to protect (including income
from a job)? Will your own health insurance cover auto accident injuries? How much insurance coverage can you afford?
These are some of the questions you should ask yourself before choosing a specific coverage plan.
UNDERSTAND YOUR OPTIONS. Use this guide to learn about the words and phrases used in auto policies. Know
the many coverage options. Review the different benefits of each option.
UNDERSTAND CONSUMER PROTECTIONS. As a New Jersey auto insurance consumer, you have rights. You have a
right to fair and equal treatment, and you have the right to get the information you need to make informed decisions.
COVERAGES: Your auto insurance policy is divided into different coverages based on the type of claim that will be paid
to you or others.
These COVERAGES are:
PERSONAL INJURY PROTECTION: Otherwise known as "PIP," this is your medical coverage for injuries you (and
others) suffer in an auto accident. PIP pays if you or other persons covered under your policy are injured in an auto
accident. It is sometimes called "no-fault" coverage because it pays your own medical expenses no matter who caused
the auto accident. PIP has two parts: (1) coverage for the cost of treatment you receive from hospitals, doctors and other
medical providers and any medical equipment that may be needed to treat your injuries and (2) reimbursement for
certain other expenses you may have because you are hurt, such as lost wages and the need to hire someone to take
care of your home or family.
Insurance policies use terms that may be unfamiliar to the average driver. It is useful to understand what these terms
mean so you can make better, more informed decisions about your coverage.
*
Agents, brokers and companies must inform you of your coverage options when applying for a new policy, or at any
time upon your request if you are already insured. You have the right to know how each choice may affect what you
pay and what your benefits would be in the event of an accident. You always have the right to ask about additional
options.
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M-592 (12-22) Page 4 of 10
UNDERSTANDING YOUR POLICY
Types of Coverages continued
EXAMPLE OF UNDERINSURED MOTORIST COVERAGE
LIABILITY: This coverage pays others for damages from an auto accident that you cause. It also pays for a lawyer to
defend you if you are sued for damages that you cause.
There are two kinds of liability coverage: BODILY INJURY and PROPERTY DAMAGE.
BODILY INJURY LIABILITY COVERAGE: Pays for claims and lawsuits by people who are injured or die as a result of
an auto accident you cause. (See page 8 for lawsuit options) . It compensates others for pain, suffering and economic
damages, such as lost wages.
This coverage is typically given as two separate dollar amounts: (1) an amount paid per individual and (2) an amount
paid for total injuries to all people injured in any one accident that you cause. It can sometimes be purchased as a
combined single limit, which offers a maximum limit of protection per accident of bodily injury and property
damage liability combined.
PROPERTY DAMAGE LIABILITY COVERAGE: Pays for claims and lawsuits by people whose property is damaged as
a result of an auto accident you cause. (May also be purchased as a combined single limit with bodily injury liability
coverage.)
UNINSURED MOTORIST COVERAGE: Pays you for property damage or bodily injury if you are in an auto accident
caused by an uninsured motorist.
UNDERINSURED MOTORIST COVERAGE: Pays you for property damage or bodily injury if you are in an auto accident
caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage.
Jane purchases $100,000 in liability coverage and $100,000 in underinsured motorist coverage. Sam purchases only
$25,000 in liability coverage. Sam crashes his car into Jane's car, causing $35,000 in damages. Sam's insurance
company pays $25,000 of the damages, while Jane's insurance company pays the remaining $10,000 from her
underinsured motorist coverage.
COLLISION COVERAGE: Pays for damage to your vehicle as the result of a collision with another car or other object.
COMPREHENSIVE COVERAGE: Pays 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. However, it will pay if you collide with an animal.
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M-592 (12-22) Page 5 of 10
UNDERSTANDING YOUR POLICY
Standard and Basic Policies
SPECIAL POLICY FOR MEDICAID RECIPIENTS ONLY
COVERAGE
STANDARD POLICY
BASIC POLICY
BODILY
INJURY
LIABILITY
PROPERTY
DAMAGE
$5,000 per accident
LIABILITY
PERSONAL
$15,000 per person,
per accident,
INJURY
PROTECTION
Up to $250,000 for certain
injuries*
UNINSURED/
UNDERINSURED
MOTORIST COVERAGE
Coverage is available
up to amounts selected
for liability coverage
None
COLLISION
Available as an option Available as an option
(from some insurers)
COMPREHENSIVE
Available as an option Available as an option
(from some insurers)
There are two common types of auto insurance policies in New Jersey. They are referred to as STANDARD and BASIC.
Both offer options as well.
STANDARD POLICY: The Standard Policy provides a number of different coverage options and the opportunity to
buy additional protection. The Standard Policy is the type of policy chosen by most New Jersey drivers.
BASIC POLICY: The Basic Policy usually costs significantly less than a Standard Policy, but provides limited benefits.
It is not for everyone, but it does provide enough coverage to meet the minimum insurance requirements of New Jersey
law. The Basic Policy could be an option for those with few family responsibilities and few assets to protect (including
income from a job).
Coverage is not included.
but $10,000 for
all persons, per accident,
is available as an option
Up to $250,000 for certain
injuries* regardless of
selected limit
The Special Policy is a new initiative to help make limited auto insurance coverage available to drivers who are
eligible for Federal Medicaid with hospitalization. Such drivers can obtain a medical coverage-only policy at a cost
of $365 a year. For more information, ask your agent or company representative or call the Department of Banking
and Insurance at 1-800-446-7467.
The following chart compares the differences between the STANDARD and BASIC policies:
As low as:
$25,000 per accident
As high as:
$100,000 or more
As low as:
$25,000 per person,
$50,000 per accident
As high as:
$250,000 per person,
$500,000 per accident
As low as:
$15,000 per person or accident
As high as:
$250,000 or more
* permanent or significant brain injury, spinal cord injury or disfigurement or for medically necessary treatment of
other permanent or significant injuries rendered at a trauma center or acute care hospital immediately following
an accident and until the patient is stable, no longer requires critical care and can be transferred to another facility
in the judgment of the physician.
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M-592 (12-22) Page 6 of 10
New Jersey Auto Insurance Buyer's Guide
Choosing a
higher deductible
may save you
money on your
premium.
UNDERSTANDING YOUR POLICY
What are Limits and Deductibles?
EXAMPLE
John has a car accident. His repair shop estimates the cost of repairs at $2,000. John
pays $750 of the bill and his insurance company pays the remainder.
UNDERSTANDING YOUR OPTIONS
Personal Injury Protection (PIP)
LIMITS: The maximum dollar amount the insurer will pay following an auto accident. Limits vary with each coverage
within the policy.
DEDUCTIBLES: Payments you have to make before the insurer pays. For example, a $750 deductible means that
you pay the first $750 of each claim.
DEDUCTIBLE OPTIONS: In addition to any savings you may realize from how much coverage
you buy, deductibles also provide savings opportunities. Cost savings can be achieved by
choosing higher deductibles. Thus, if you feel you need a high level of PIP coverage but want to
reduce your premium, you can save money by agreeing to pay more out-of-pocket through a
higher deductible if you are injured in an auto accident. Your insurer will pay the medical bills
over the deductible amount you choose. No matter what deductible you choose, there is also a 20
percent co-payment for medical expenses between the deductible selected and $5,000. That
means you pay 20 percent, and your insurer pays 80 percent.
HEALTH CARE PRIMARY: Cost savings can also be achieved by using your own health insurance as a primary source
of coverage in the case of injury related to an auto accident. Before selecting this option, you should find out if your
health insurance will cover auto accident injuries and how much coverage is provided. MEDICARE and MEDICAID
cannot be used for the Health Care Primary option.
EXTRA PIP PACKAGE COVERAGE: These are additional benefit options provided under the STANDARD POLICY.
INCOME CONTINUATION: If you cannot work due to accident-related injuries, this
coverage pays lost wages, less Temporary Disability Benefits you may receive if
your disability prevents you from working, up to the amount you select.
ESSENTIAL SERVICES: Pays for necessary services that you normally do yourself,
such as cleaning your house, mowing your lawn, shoveling snow or doing laundry if
you are injured in an auto accident.
DEATH BENEFIT: In the case of death, family members or estates will receive any
benefits not already collected under the income continuation and essential services
coverages.
FUNERAL EXPENSE BENEFIT: Pays for reasonable funeral expenses up to the limit
you select if you die as a result of an auto accident.
EXAMPLE:
Sam and Jane each have an accident that results in $10,000 in medical expenses.
Sam chose the minimum $250 deductible. He pays the $250 deductible plus $950 (20 percent of the $4,750 that is
left of the first $5,000) and the insurer pays the remaining $8,800.
Jane chose the $2,500 PIP deductible for a 25 percent reduction in the PIP premium. She pays the first $2,500 as the
deductible. She also pays $500 (20 percent of the $2,500 that is left of the first $5,000) and the insurer pays the
remaining $7,000.
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UNDERSTANDING YOUR OPTIONS
Comprehensive Coverage/Collision Coverage
If you choose the STANDARD POLICY:
UNDERSTANDING YOUR OPTIONS
Uninsured/Underinsured Motorist Coverage
A minimum amount of
Uninsured/Underinsured
Motorist Coverage
is required.
You can purchase higher limits if
you want more coverage.
Comprehensive and Collision Coverage are always available as options of the STANDARD POLICY.
If you choose the BASIC POLICY: Insurers are not required to provide these options in the BASIC POLICY.
UNINSURED MOTORIST COVERAGE: Pays you if you are in an auto accident
caused by a driver who does not have the minimum level of insurance required by
law. Claims that you would have made against the uninsured driver who caused
the accident are paid by your own policy. Uninsured motorist coverage does not
pay benefits to the uninsured driver.
UNDERINSURED MOTORIST COVERAGE: Pays you if you are in an auto
accident caused by a driver who is insured, but who has less coverage than your
underinsured motorist coverage. Damages greater than the limits of the other
driver's policy are covered by your policy up to the difference between the limits of
your underinsured motorist coverage and the other driver’s policy limit.
If you choose the STANDARD
POLICY:
COMPREHENSIVE (also known as comp or other than collision) and COLLISION coverage are not required by
law, but may be required under the terms of an automobile leasing or financing contract.
Collision coverage pays you for damage that you cause to your automobile. You can also make a claim under your
own collision coverage for damage to your car from an auto accident you did not cause. This may take less time than
making a property damage liability claim against the driver who caused the auto accident. Your insurer then seeks
reimbursement from the insurer of the driver who caused the auto accident.
Comprehensive coverage pays you if your automobile is stolen or for damage to your automobile caused by things not
covered under collision coverage, such as vandalism, flooding, fire, a broken windshield or damage from an animal.
DEDUCTIBLE: The STANDARD deductible for comprehensive and collision coverage is $750. Higher and lower
deductibles are available as options. Higher deductibles can reduce your premium.
NAMED DRIVER EXCLUSION: Prevents certain drivers on your policy from being covered by collision and/or
comprehensive coverage on a specific automobile. This can lower your premium, but if the excluded driver operates the
automobile and is involved in an auto accident, you are not insured for collision and/or comprehensive coverage; which
means you could be personally responsible.
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New Jersey Auto Insurance Buyer's Guide
M-592 (12-22)
Page 8 of 10
UNDERSTANDING YOUR OPTIONS
The Right to Sue
IMPORTANT
*
loss of body part
*
significant disfigurement or significant scarring
*
a displaced fracture
*
loss of a fetus
*
permanent injury (Any injury shall be considered permanent when the body part or organ, or both, has not healed to
function normally and will not heal to function normally with further medical treatment based on objective medical
proof.)
*
death
The choice you make affects how much your insurance will cost and what claims will be paid in the event
of an accident.
The choice you make regarding your right to sue another driver applies to you, your spouse, children and other
relatives living with you who are not covered under another automobile insurance policy.
The UNLIMITED RIGHT TO SUE and LIMITED RIGHT TO SUE options only cover lawsuits for "pain and suffering"
or non-economic losses. Your medical expenses and some economic losses for injuries in auto accidents will be
paid up to the limits of your PIP coverage and are not affected by the choice you make here.
For the STANDARD POLICY, you must make a choice about the rights you will have if you are injured in an automobile
accident. (The BASIC POLICY includes the LIMITED RIGHT TO SUE option.)
UNLIMITED RIGHT TO SUE: Under the No Limitation on Lawsuit Option, you retain the right to sue the person who
caused an auto accident for pain and suffering for any injury.
LIMITED RIGHT TO SUE: By choosing the Limitation on Lawsuit Option, you agree not to sue the person who caused
an auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below: (Choosing
this option does not affect your ability to sue for economic damages such as medical expenses and lost wages.)
WARNING: Insurance companies or their producers or
representatives shall not be held liable for your choice of lawsuit
option (Limited Right to Sue or Unlimited Right to Sue) or for your
choices regarding amounts and types of coverage. You cannot sue
an insurance company or its producers or representatives if the
Limited Right to Sue option is imposed by law because no choice
was made on the coverage selection form. Insurers and their
producers or representatives can lose this limitation on liability for
failing to act in accordance with the law. See N.J.S.A. 17:28-1.9 for
more information.
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New Jersey Auto Insurance Buyer's Guide
M-592 (12-22) Page 9 of 10
POLICY OPTIONS CHART
COVERAGES Options That What Most Options That
Cost Less Drivers Choose Cost More
LIABILITY:
$300,000 $500,000
Bodily Injury and
$ 75,000
Property Damage
$100,000
PERSONAL INJURY
PROTECTION (PIP)
Medical Expense Limit
$15,000
$50,000 $250,000 Some insurers may
$75,000 offer more than
$150,000 $250,000
Medical Deductible
$500; $1,000 $250 -------
$2,000; $2,500
Extra PIP Options:
Income Continuation, Essential
You can decline Most consumers choose Packages may be
Services, Death Benefit and
the Extra PIP the Extra PIP Package available in higher
Funeral Expense Benefit
Package amounts
Health Insurer for PIP
Choose your own Most consumers do not -------
Option
health insurer choose their own health
insurer
UNINSURED/
UNDERINSURED
$ 75,000 $300,000 $500,000
MOTORIST COVERAGE
$100,000
COLLISION
$750; $1,000 $50; $100; $150
COVERAGE
$1,500; $2,000 $500 $200; $250
DEDUCTIBLE
COMPREHENSIVE
$750; $1,000 $50; $100; $150
COVERAGE
$1,500; $2,000 $500 $200; $250
DEDUCTIBLE
LAWSUIT OPTION
------- Limitation on No Limitation on
Lawsuit Option Lawsuit Option
Policy No.:
New Jersey Auto Insurance Buyer's Guide
M-592 (12-22) Page 10 of 10
WHERE TO GET MORE INFORMATION AND HELP
This Buyer's Guide is intended to provide general information to help you make coverage choices. It is not a
substitute for the policy language, which governs.
Additional information regarding coverages or premiums is available from the insurer or producer.
Contact Us:
Government Employees Insurance Company
GEICO Indemnity Company
GEICO Casualty Company
GEICO Choice Insurance Company
GEICO Secure Insurance Company
1-800-841-3000
Contact the Department of Banking and Insurance
on the web:
www.dobi.nj.gov
by phone:
(609) 292-7272
or the Consumer Hotline at 1-800-446-7467
by mail at:
NJ DOBI
P.O. Box 471
Trenton, NJ 08625-0471
or in person at:
NJ DOBI
20 West State Street
Trenton, NJ 08608
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