Since New Jersey is a no-fault state like Florida, drivers are responsible only for the property damages they cause to someone else in at-fault accidents, and must obtain property damage coverage of $5,000. However, every driver is responsible for their own injuries and those of their passengers under PIP, which is either $15,000 per person or up to $250,000 for injuries such as these:
- Permanent or significant brain injury
- Spinal cord injury
While $250,000 may sound like enough, the coverage doesn’t apply to all types of injuries. Additionally, $5,000 of property damage is often well below the cost for repairs or replacement. It also doesn’t cover your property, only the other party’s. So if you cause an accident, you may find yourself responsible for costs out of pocket.
To avoid this scenario, we recommend the following policies.
- High liability limits: Buy as much liability coverage as you can afford, up to $500,000 of both property damage and bodily injury coverage.
- Collision coverage: To pay for your property damages from collisions, regardless of fault, add on collision coverage. The limit should be your car’s actual market value (AMV). That way, if your car is declared a total loss, you can replace it.
- Comprehensive coverage: Vandalism, weather, and theft can also damage your car. For these instances, purchase comprehensive coverage with a limit matching your AMV.
- Uninsured/underinsured motorist coverage: Only 3 percent of New Jersey drivers are uninsured, a fraction of the national average of 12 percent.2 Yet, if someone driving without insurance or without sufficient insurance hits you, you want to know your bodily injuries and property damages will be paid for. To ensure this, match your uninsured/underinsured motorist coverage to your liability limits.