MICHAEL W. KRUTMAN, ESQUIRE
    Certified by the Supreme Court of NJ as a Civil Trial Attorney

    KRUTMAN & EUSTACE, P.C.
    2525 NOTTINGHAM WAY
    HAMILTON, NJ 08619
    (609) 890-2525
    (609) 890-2509 FAX

    “TIPS ON AUTO INSURANCE”

I    NEVER SELECT THE “BASIC POLICY”

Auto Insurance companies will offer a “basic policy” which only provides limited medical coverage and trivial liability coverage.  No individual or family with any assets or income from a job should buy such a policy.  Without liability coverage, you can be sued and your assets exposed.  If successful, a Judgment can dramatically affect your financial future, your credit rating and even your ability to own or drive a car.  Always buy the standard policy.  It is the only one that provides adequate coverage.

II     GET GOOD LIABILITY PROTECTION

Liability insurance is what protects your family and assets if you caused a motor vehicle accident.  High liability protection can help assure you will not be financially stripped.  The lowest amount of liability protection allowed in the State of New Jersey is $15,000.00 and most companies offer up to $500,000.00 and a few up to $1,000,000.00 in coverage.  It is important to note that the difference in price between $100,000.00 and $500,000.00 in coverage is usually minimal.  To be safe you should purchase the highest amount possible.  Unfortunately, one of my clients who had $100,000.00 in coverage caused an accident and the other driver was seriously injured. As a result, the other driver proceeded with a lawsuit against him and he had to pay money out of his own pocket in addition to the $100,000.00 policy limits.

III    GET THE HIGHEST UNINSURED/UNDERINSURED COVERAGE

Underinsured motorist coverage protects you and your family if you were hit by a poorly insured driver.  Uninsured motorist coverage protects you and your family if you were hit by a driver who does not have insurance coverage, who leaves the scene of an accident, or who elects the “basic policy”.  You need the highest uninsured/underinsured coverage possible.  This is usually inexpensive and should be made as high as your liability coverage. The difference in price between $100,000.00 in uninsured/underinsured motorist coverage and $500,000.00 in coverage is usually minimal.  This coverage is extremely important if you are seriously injured and the other driver either has no insurance or minimal coverage.  I have had clients who suffered serious injury caused by a negligent driver who had only $15,000.00 in liability coverage.  Unfortunately, because my client only had $15,000.00 in underinsured motorist coverage the most he/she could recover from insurance was $15,000.00.  If my client had $100,000.00 in coverage he/she would have had the option of trying to recover an additional $85,000.00 from his own insurance company in underinsured motorist benefits. 

Do not elect to have less UM/UIM coverage then your liability coverage if offered to you.  The minimal savings is not worth the loss of coverage.
       
IV      ON THE “LIMITATION ON LAWSUIT THRESHOLD OPTION”

While it may be more expensive, the “No limitation on lawsuit threshold option” is the best option for you and your family.  If you choose the “Limitation on lawsuit option” instead of the “No limitation” option then you may not be able to make a claim for some permanent injuries.  The “imitation on lawsuit threshold option” requires objective proof that you suffered a permanent injury from a motor vehicle accident that was not your fault.  An injury is considered permanent when the body part has not healed to function normally and will not heal to function normally with further medical treatment. This makes it more difficult to be compensated for your injuries but does not mean you are giving up your right to do so. You must weigh whether the cost of savings offered is worth giving up you or your family’s ability to be fairly compensated for your injuries in some circumstances if a car accident should occur that is not your fault.  If at all possible, purchase the “No limitation on the lawsuit threshold option.”

V    PERSONAL INJURY PROTECTION (PIP) AND MEDICAL COVERAGE

There are many different options regarding medical coverage.  Choose $250,000.00 PIP coverage, since many private health plans exclude treatment for auto injuries or require reimbursement to them for any medical bills they paid from any compensation recovered by you.

VI    PURCHASE AN UMBRELLA POLICY

This will provide additional liability coverage of up to one million dollars or more for a very reasonable price.  In addition, some insurance companies will also provide additional underinsured motorist coverage with an umbrella policy.

VII    TELL YOUR INSURANCE AGENT WHAT YOU WANT !!!

Unfortunately, many insurance agents will give quotes for insurance and not tell you the threshold option or coverages they assigned.  The quote will almost always include the “Limitation on Lawsuit threshold” option because it is cheaper. Accordingly, it is important that you tell your agent what options and coverages you want and you check to make sure they were provided to you on your policy.  If you don’t, you may not realize the coverages and options on your automobile policy until you are in a motor vehicle accident.  Therefore, it is important to remember to tell your agent that you want the: (1) “No Threshold” option; (2) $300,000 or more in Liability and Uninsured/Underinsured Motorist coverage; (3) Check your declaration page to confirm you were given the options and coverages you requested; (4) If you are provided a cheaper quote for auto insurance make sure you are being provided the same coverage and options you previously had and not less coverage; (5) Remember that insurance agents don’t necessarily understand the different options you have.  For example I spoke with an insurance agent who incorrectly thought you had to suffer a broken bone or death to pursue a personal injury claim if you had the limitation on lawsuit coverage.  He also admitted to me that they automatically assign the limitation on lawsuit option unless the customer asks not to have it.  Thus, it is important that you tell the agent what coverages you want.