If you are among the thousands of persons injured in a motor vehicle collision in New Jersey each year, chances are that any settlement or jury verdict you receive will be satisfied by the liability insurance company that insured the person who caused the collision. In New Jersey the smallest amount of liability insurance allowed by law is a 15/30 policy. This means that any one person injured in a car accident caused by a driver with 15/30 policy limits can receive up to $15,000, depending on the seriousness of their injury. If more than one person is injured then any individual can receive up to 15,000 but no more than 30,000 will be paid by the insurance company. So, if two people are hurt and their injuries are of sufficient value each person can receive up to $15,000. If three people are hurt then one person can receive $15,000 and two people can divide the other 15,000. The amount someone gets paid is dependent on the seriousness of their injury. It is possible for a person to receive less than $15,000, even where the policy limit is 15/30 and the injured party is the only person hurt in the accident. The value of the person’s claim is dependent upon how badly they are hurt.
Of course insurance companies offer higher limits then a 15/30 policy limit. In New Jersey insurance companies typically offer policies with the following limits: 25/50, 50/100, 100/300, 250/500 and combined single limit policies in the amounts of 50, 100, 250, 300 and 500. This list is by no means exhaustive.
A combined single limit policy (CSL) is one where the entire liability policy limit is expressed as a single number. For instance, a $50,000.00 CSL policy is one which provides a lump sum of $50,000.00 to compensate any person(s) injured by the fault of the policy owner. If a driver insured with a $50,000.00 CSL policy negligently injures two persons and the injuries are of sufficient value then the injured parties may apportion the $50,000.00 policy such that the sum of what both parties receive equals $50,000.00.
In addition to liability insurance which provides insurance coverage to protect your assets in the event that you are sued, companies also offer Uninsured/Underinsured insurance (also known as UM/UIM coverage) to protect you when you are injured in a motor vehicle collision casued by the fault of someone who either does not have insurance or whose insurance is not sufficient to pay for the damages they cause. This insurance is aptly named Uninsured and Underinsured coverage. It is insurance coverage that you as an owner and operator of a car may purchase from your own insurance company. It protects you in the event that the person who causes the collision does not have insurance or does not have enough insurance to compensate you for the injuries you sustain.
A few important points about Uninsured/Underinsured insurance coverage. First, it can never be higher than your own liability insurance. This means that if you have a $100/300 liability limit, the most Uninsured/Underinsured insurance you may purchase is 100/300. Likewise if you have a $500,000.00 CSL liability policy the most Uninsured/Underinsured coverage you may purchase is $500,000.00. Next Uninsured/Underinsured coverage is by far less expensive to purchase than liability coverage. Therefore if you buy liability limits of $500,000.00 make sure that you have purchased Uninsured/Underinsured limits in the same amount. Not to do so would be foolish.
By law anyone who owns a car in the tri-state area must also own car insurance. While car insurance issues may seem complicated, as a consumer it is important that you understand what you are buying. A thoughtful decision today will ensure that you and your family members are properly protected if they are involved in a motor vehicle collision. At Stark and Stark we are always available for an individual insurance review, free of charge.