guide on NJ Assigned Risk and NJ Preferred
Risk Automobile Insurance.
you live or, more precisely, where you
keep your auto in NJ at night has a
bearing on your chances of having an
accident or becoming a victim of theft
or vandalism. That's why a vehicle owner
Newark NJ, pays a higher
rate than the owner of an identical
factors affecting insurance
territory rates include time and efficiency
of police response and law enforcement,
local road and traffic conditions and
the quality of local medical services.
Insurers even factor in the litigation
rates in a given area, how many lawsuits
are filed, go to trial, are settled
out of court, and for how much money.
Why are rates different
for different cars, even if the cars
cost the same?
are also grouped into categories according
to their chances of being damaged, vandalized
or stolen. Insurance companies generally
consider the size and type of car as
well as the value and the cost of repairs
which vary greatly, even on cars that
cost about the same amount. Therefore,
it is assumed that a new sport utility
vehicle is expected to hold up better
in an accident than a sleek sports car
or a sub-compact car.
is why you should research insurance
coverage before you buy your car. It
helps you to understand the actual cost
and indicates those vehicles with good
safety records. Your NJ insurance company
will ultimately reward you with lower
premiums for putting safety first.
What is no-fault insurance?
- No-fault insurance is a system adopted in some states that
essentially bypasses the conventional
legal procedure which finds fault
in an accident. This is the procedure
by which you hire a attorney, file
suit and possibly go to court to
prove the accident was the other
guy's fault. No-fault simply does
away with the concept of one party
or the other being at fault--no
lawyers, no court, no judge, no
jury, no lengthy lawsuits against
the other party. This is considered
beneficial to all taxpayers, because
it eliminates costly legal proceedings
that the state must manage, and
to insurance policyholders, because
it helps keep rates down.
you are insured in a no-fault state
and have an accident, you do not have
to go after the other driver. You contact
your own insurer and file a claim. Your
own insurance policy guarantees you
immediate compensation for damages,
medical expenses, lost wages, essential
services, rental car arrangements etc.
(If these coverages are included)
type and range of no-fault coverage
varies from state to state. What defines
the limitations of no-fault policies
can differ in two important areas:
- Threshold--The type of
damage or injury or the cost of
repair or recovery that triggers
the need for legal action.
- Mandated--Benefit Level
The package of benefits (medical,
wage loss, replacement services
and other expenses) your state requires
you to carry.
No. Some states, while not mandating
auto insurance, have what is known as
financial responsibility laws that require
all drivers to be able to pay for any
damage or injury they may cause. However,
carrying liability insurance is still
the best and most affordable way for
you to meet your state's financial responsibility
requirements once you know what they
UM and UIM policies are offered by law
in all states, including no fault states.
In fact, some states require all motorists
to carry this coverage in order to gain
protection from inadequate insurance
coverage of other drivers that may not
carry enough or higher limits as the
majority does; i.e., 100-300-50,000.
First, call the police to the scene
to be sure all pertinent information
is properly recorded. Your nerves
will be shaken right after an accident,
and it helps to have a calm and knowledgeable
person walking you through the necessary
contact your policy holder services
or claims number usually on you ID Card
immediately and ask about filing a claim.
If you followed all the recommended
guidelines and procedures when you bought
your policy, you should be covered within
the benefits and or limitations of that
policy. Remember, your car insurance
policy is designed to protect you and
anyone in your vehicle.
If the cost of your physical damages
or personal injuries exceed the amount
your policy will pay for, it may be
time to take legal action against the
other party. Even if you have no-fault
insurance, sometimes the only way to
be compensated is to place blame and
responsibility where it belongs. That
is why it is best to get a police report
documenting the incident and any witnesses
statement while it is fresh in their
minds. This will preserve that moment
in time and remove any room for doubt
later in the legal process.
is better to have the police report
and not really need it, than it is to
need one for court and not have one
because it would have taken another
thirty minutes to an hour extra at the
in most states your insurer can cancel
your policy only if:
- you fail to pay your premium;
- you lose your driver's license;
- you are guilty of material misrepresentation
during the application process i.e.,
you fail to notify your insurer
of a recorded violation, such as
a drunken driving, or possession
of drugs or any illegal activity
- you fail to report a substantial
change of risk, such as buying a
new high performance sports car
to replace an old high mileage family
your insurer may choose not to renew
your policy for a variety of reasons.
Do you have a bad driving record? Have
you received a lot of speeding tickets?
Have you ever been caught driving drunk?
Not only are these scenarios considered
unsafe and illegal, they are justifiable
cause for your insurer to label you
a bad risk and refuse to renew your
policy. Some underwriters may feel compelled
to cancel policies after only one accident.
This does not apply to State High Risk
Insurance Pool policies.
do you live? Has the neighborhood changed
in the last few years? Have the accident
or crime rates risen noticeably? As
regions are reassessed periodically,
their status could change and you could
suddenly find yourself living in a higher
risk area, where your insurer's rates
may not be adequate to cover losses.
"good" drivers can find themselves in
the position of being dropped by their
current carrier. Reasons range from
a couple of moving violations, or multiple
accidents, or other serious violations
that make you a high risk to situations
outside your control, such as when insurers
in your state are suffering severe business
is why it is important to note that
if you are licensed to drive, by law,
you are eligible for insurance. However,
your options for new coverage may be
limited. Each state has created and
regulates a market of last resort for
those who cannot otherwise obtain coverage.
These groups have various names, depending
on the state you live in, such as assigned
risk automobile insurance plans or the
residual market, or the State high risk
of the reason you were dropped or cancelled
by your insurer, you need to act immediately
to get another policy. Under no circumstance
should you drive your vehicle without
knowing one hundred percent that you
have current insurance. If you do find
yourself in the assigned risk residual
market pool, the price may be higher
but it may be your only alternative
in maintaining your freedom to drive.
most obvious way to maintain your low
risk status is to keep a clean driving
record. If you've been in an accident
or two, consider taking a defensive
Also, look into purchasing special safety
and security features for your car,
such as anti-lock brakes and an alarm
system, or try OnStar. Your ARAIP-NJ
PAIP insurance producer can give you
further tips on how to convince your
insurer you're a safe driver.
Insurers often discount their rates
in order to encourage good driving practices
and the use of safety and security precautions.
Depending on the insurance company,
you can often lower your rates from
5 to 55 percent.
Sometimes the investment you make in
your vehicle is worth the discount,
and sometimes it's simply worth some
peace of mind. For example, the purchase
of anti-lock brakes merits a discount
from nearly every insurer, but the discount
probably will not pay for the brakes
which cost several hundred dollars during
the normal life of your vehicle. Anti-lock
brakes are touted, nonetheless, as a
life-saving feature and deserves serious
consideration when safety is a top priority.
Insurers generally offer discounts for:
- Safety Features Anti-lock
brakes, air bags and passive restraint
systems i.e., automatic seat belts.
- Defensive Driving Clean
violation record, driver's education
courses for teenagers and defensive
driving or accident prevention courses
for adults insurance discounts for
the latter are required in some
- Security Systems Alarms,
electronic locks, VIN etching and
automotive disabling devices.
- Changing The Driving Habits
Try commuting by public transit,
using a company vehicle for work-related
travel and car-pooling.
- Formal Agreements Not to
Drink and Drive The availability
of a discount for signing such an
agreement varies among insurers
and states, however is a powerful
idea that works.
- Buying Home Owners and Auto
Policies from the Same Company
If you own a home and an automobile
and you are insured by two different
companies, check into the cost of
carrying both policies by one insurer.
Your agent can give you guidance
as to which insurers offer discounts.
This will always offer you the cheapest
buy, so put it in your corner when
shopping for rates
- You can also lower your insurance rates by requesting higher
deductibles, which is the amount
of money you pay out of pocket before
you make a claim. Increasing your
deductibles on collision and comprehensive
coverage from $250 to $500, or even
$500 to $750 will bring your rates
down. Moreover, you may not need
collision and comprehensive coverage
if you drive an older car. Ask your
producer which discounts are available
How does adding drivers
to my policy affect my rates?
more people you allow to drive your
vehicle on a regular basis, the greater
the chances of your vehicle being in
an accident. Teenagers are especially
expensive to insure because they are
the least experienced drivers.
A driver's-ed course can help ease the
burden of insurance costs since it teaches
your teenager defensive driving techniques.
If your child's high school does not
offer drivers education, try to find
one offered by another school or a private
firm in the area. After all, the cost
of driver's-ed could be cheaper than
the extra cost of your insurance. Many
insurers offer "good student" discounts
An adult's driving experience can also
affect your rates significantly. Don't
assume that every adult you know has
been driving since age 17 or 18 or is
a competent driver with a clean driving
or insurance record. Again, taking a
defensive driving course is a good way
for adults to prove they are also responsible
drivers, thus lowering their risk and
their insurance premium rates.
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