You’re cruising down the Garden State Parkway on your way to work when suddenly another driver sideswipes your car. You pull over to exchange information, only to discover the other driver either doesn’t have insurance or has inadequate coverage. What do you do now? You might encounter this scenario more often than you think, and that’s precisely why you need to understand underinsured and uninsured motorist coverage as a New Jersey driver.
In this blog post, NJ auto accident attorney Peter Davis shares what you need to know about coverage – whether it’s required, why you might want it even if it’s not, and how it can protect you in unexpected situations.
What is Underinsured and Uninsured Motorist Coverage?
Before we delve into the requirements, let’s clarify what these types of coverage actually mean:
- Uninsured Motorist (UM) Coverage: This protects you if you’re in an accident with a driver who does not have any auto insurance.
- Underinsured Motorist (UIM) Coverage: This kicks in when you’re in an accident with a driver whose insurance limits are too low to cover all your damages.
Both types of coverage can help pay for medical expenses, lost wages, and other damages you might incur in an accident where the at-fault driver can’t fully compensate you.
Is It Required in New Jersey?
The requirement for uninsured and underinsured motorist coverage in New Jersey depends on the type of auto insurance policy you select.
If you choose a standard auto insurance policy, New Jersey law mandates that it includes both underinsured and uninsured motorist coverage. The minimum required limits are:
- $25,000 per person for bodily injury
- $50,000 per accident for bodily injury
- $25,000 for property damage
However, if you opt for a basic auto insurance policy, uninsured and underinsured motorist coverage is not mandatory. The basic policy offers limited coverage and does not include UM or UIM coverage by default.
Why Consider Uninsured and Underinsured Motorist Coverage?
If you have a standard policy, you already have UM and UIM coverage included, providing you with protection against drivers who are either uninsured or underinsured. This is crucial in New Jersey, where, despite laws requiring insurance, not all drivers comply.
Real-Life Examples
Consider a situation where you’re involved in a severe accident with a driver who only carries the minimum liability coverage. If your medical bills, lost wages, and vehicle repairs total $75,000, but the at-fault driver’s insurance only covers $25,000, UIM coverage would step in to cover the remaining $50,000. Without this coverage, you’d be left to pay these costs out of pocket, which could lead to significant financial strain.
Additionally, if you’re hit by an uninsured driver—someone who simply chose to break the law by not carrying insurance—UM coverage ensures that your expenses are covered up to your policy limits. Without UM coverage, you might have to pursue the at-fault driver personally, which can be time-consuming, stressful, and ultimately, unsuccessful if the driver has no assets.
Financial Protection
Uninsured and underinsured motorist coverages are also essential because they protect you from potential legal battles. If the at-fault driver’s insurance isn’t sufficient, you may need to sue them to recover your losses, which can be a long and costly process. With UM and UIM coverage, your insurance steps in, reducing the likelihood of having to engage in protracted litigation.
Protecting Your Family
It’s also worth considering that UM and UIM coverage protect not just you, but also your passengers. If you often drive with family members or friends, ensuring that everyone in the vehicle is covered in the event of an accident is critical. The medical costs and potential lost income for multiple people can quickly add up, making comprehensive UM and UIM coverage even more vital.
How Much Coverage Should You Get?
While the state minimums provide a baseline, they may not offer enough protection in many scenarios. When deciding on your coverage limits, consider:
- Your assets: Higher coverage limits can better protect your savings and property if you’re sued after an accident.
- Your income: If you have a high income, you might be a target for lawsuits. More coverage can provide better protection.
- Your risk tolerance: If you prefer more peace of mind, higher limits might be worth the extra cost.
Many insurance professionals recommend matching your UM/UIM limits to your liability limits. This ensures you’re as protected from uninsured and underinsured drivers as you are from claims against you.
The Cost-Benefit Analysis
If you have a standard policy, the cost of UM/UIM coverage is already included in your premium. For those with a basic policy, they should consider buying a policy with full coverage to include UM/UIM.
Comparing Costs
To put it in perspective, the cost of UM/UIM coverage is typically a small fraction of your overall premium. For example, adding these coverages might increase your monthly premium by $10 to $20, depending on your driving record, vehicle type, and the amount of coverage you choose. However, this small increase can save you thousands—or even tens of thousands—of dollars if you’re involved in an accident with an uninsured or underinsured driver.
Long-Term Savings
Consider the long-term financial benefits. While it’s easy to focus on the immediate cost of insurance premiums, the savings from having UM/UIM coverage in the event of an accident far outweigh the initial costs. For instance, without this coverage, a single accident with an underinsured driver could drain your savings, force you to take out loans, or even push you into bankruptcy. By investing a little more in your insurance now, you’re safeguarding your financial future.
In New Jersey, if you have a standard auto insurance policy, you’re already protected with both uninsured and underinsured motorist coverage. For those with a basic policy, consider adding these coverages to ensure you have comprehensive protection. Whether you’re on the Garden State Parkway or any other road in New Jersey, having the right coverage can provide you with peace of mind and financial protection in the event of an accident.
Take Control After an Accident with an Uninsured or Underinsured Driver
An accident with an uninsured or underinsured driver can turn your life upside down. Don’t face a car accident claim on your own. The Law Offices of Peter N. Davis & Associates is here to help you regain control and secure the compensation you need.
For over three decades, we’ve been fighting for individuals who’ve faced financial and emotional challenges after accidents caused by negligent drivers. We understand the complexities of these cases and are committed to standing by your side to ensure you’re not left shouldering the costs alone.
Whether you’re dealing with insurance hurdles or simply need clarity on your legal options, our team is available 24/7 to provide the support and representation you need. Our goal is to help you get the best possible outcome so you can focus on your recovery and move forward with confidence.
Don’t let the actions of an uninsured or underinsured driver disrupt your future. If you’ve been searching online for “car accident lawyers near me,” contact The Law Offices of Peter N. Davis & Associates instead at (973) 279-7246 for your FREE case review with a NJ personal injury attorney. If more convenient, you can also fill out our confidential online form. Let us work tirelessly to get you the justice and compensation you need to move forward.
Copyright © 2024. The Law Offices of Peter N. Davis & Associates, LLC. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
The Law Offices of Peter N. Davis & Associates, LLC
72 Essex Street, Suite 2,
Lodi, NJ 07644
(973) 279-7246
https://peterdavislaw.com/
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