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What happens if an at-fault driver has a basic New Jersey policy?

How much insurance a driver chooses to carry in New Jersey is largely a personal decision. Those with more income and valuable personal property may see the benefit in purchasing higher amounts of liability coverage so that they don’t face a lawsuit if they ever cause a crash. Others struggling to make ends meet may just want to keep their costs as low as possible.

Still, even those who don’t have unusual levels of income and personal property might want to purchase uninsured motorist protection and other supplemental coverage so that they aren’t entirely dependent on someone else’s decisions after a crash. New Jersey offers standard liability policies that people can add to by investing in extra coverage. The state also allows those who struggle to afford standard insurance to purchase a Basic Policy with even lower amounts of coverage. What happens after a car crash caused by someone with a Basic Policy in New Jersey?

Coverage may be far from enough

The big concern when someone with mediocre insurance causes a crash is that they won’t be able to fully compensate the other people involved in the wreck. A low-cost Basic Policy is a great option for those who struggle to afford to drive, but it can cause real issues after a crash.

When the driver to blame for the wreck has only basic coverage instead of a standard policy, they won’t be able to cover many of the costs the crash generates. Their policy may only offer $5,000 in property damage liability coverage and another $15,000 in no-fault personal injury protection (PIP) for the driver or the other occupants of their vehicle at the time of the wreck. They may not have any bodily injury liability coverage at all.

Although the other party involved in the crash will have no-fault PIP coverage on their policy, they won’t be able to make a sizable claim against the liability coverage of the party at fault for the crash. In some of these cases, those injured in a collision by someone with a Basic Policy will have few ways to seek compensation.

Personal injury lawsuits are an option in scenarios where someone has expenses related to a crash that far exceed what insurance will pay. Understanding how and why insurance falls short of fully compensating people after a wreck may benefit those worried about the total costs generated by a recent collision.