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Frequently Asked Questions

What is no-fault insurance?

Most people believe that the insurance company of whoever caused the accident should pay the wounded person's medical expenditures. While this appears to make sense in terms of justice, and was the case 40 years ago, it is not the case in New Jersey. Under a first-party system, no-fault means that medical bills will be paid regardless of culpability. No-Fault was created in part as a result of demand from doctors and hospitals who did not want to wait for a determination of who caused an accident in order to get compensated.  Under the current No-Fault system, the medical pills get paid quickly because fault doesn’t matter, and that allows injured parties to receive prompt medical care.

I have an older car with a very low current market value; do I really need auto insurance?

Most states have passed mandatory insurance legislation requiring drivers to have at least some form of automotive liability insurance. These laws were enacted to ensure that victims of automotive accidents receive compensation when their losses are caused by the negligent actions of another person.

If I loan my car to a friend, are they covered under my automobile insurance policy?

When you knowingly lend your car to a friend or associate, he or she is covered by your auto insurance coverage. In reality, even if you do not explicitly grant permission each time someone uses your car, they are still insured under your auto insurance policy if they have a reasonable belief that you would have granted them permission to drive the car.


If I rent a car, do I need to purchase insurance from the rental company?

This question is not as simple to answer as it formerly was. In the not-too-distant past, most auto insurance policies would include rental car coverage whenever you rented one. A personal auto insurance policy (PAP) usually extends damage protection to rental vehicles, but only if it is a "full coverage" plan, which means it protects against losses caused by collision, rollovers, and a variety of other hazards (such as flood, fire, and theft) known as "other than collision" (a.k.a. comprehensive). If the rental automobile is damaged or stolen, a bare-bones PAP that only covers liability and uninsured motorists will be useless. PAP liability coverage only covers damage to other vehicles and property.  PAP coverage may be limited to the value of the car the renter owns, not the one rented.


I just had an accident, what now?

  • The tasks you must fulfill following an accident are mandated by both state law and the terms of your contract. Obviously, the first thing you should do is check on everyone and, if necessary, call an ambulance.

  • In most states, the police should be notified of most accidents.

  • If at all possible, provide the other driver(s) involved in the collision with your name, address, phone number, and the name of your insurance company and/or agent. You must also obtain this information from the other motorist (s).

  • You should contact your insurance agent or company as soon as possible to alert them that you have been involved in an accident.

  • Finally, in order to get compensation from your insurer, you must meet a number of conditions in the insurance contract. For example, throughout any inquiry conducted during the claims settlement process, you must cooperate with your insurance. Failure to perform any of these actions can, and occasionally does, result in your insurance provider refusing to pay for damages that would otherwise be covered.

Does insurance go up if I have an accident or if I get a ticket?

Actuaries and statisticians who have examined the claims behavior of people involved in accidents have long known that people who have recently had an accident or received a ticket are more likely to have another accident in the next couple of years than people with a clean driving record.

Insurance companies utilize this information not to punish those who have been in an accident, but to charge them the premium that best reflects their risk of having an accident. People who are more likely to be involved in an accident should be expected to pay greater insurance.

Can I sue the other party if accident was not my fault?

In New Jersey, when you get automobile insurance, you can opt to whether or not you can sue another party if you are harmed in an automobile accident. This is known as the Limitation on Lawsuit Threshold or No Limitation on Lawsuit Threshold option. If you choose the Limitation on Lawsuit Threshold, you must sustain bodily injury that results in one of the following: loss of a body part; significant disfigurement or significant scarring, displaced fracture; loss of fetus, death, or permanent injury in order to receive compensation for your pain and suffering from an auto accident. (An injury is deemed permanent when the physical part or organ, or both, has not healed sufficiently to function normally and will not recover sufficiently to operate normally with additional medical care.) The permanent injury must be demonstrated by objective medical evidence, which involves medical testing as well as a number of other standards, under the Limitation on Lawsuit Threshold. However, it is sufficient to know that the Limitation on Lawsuit Threshold makes obtaining compensation for your auto accident-related injuries extremely difficult.

If you pick the No Limitation on Lawsuit Threshold option, your right to sue is unaffected, regardless of the type of injury you incurred. So, why would someone want to limit their ability to sue? The answer is simple: choosing No Limitation on Lawsuit Threshold costs significantly more than choosing Limitation on Lawsuit Threshold.


What make up the cost of my automobile insurance?

A variety of factors can influence the cost of your auto insurance, some of which you can manage and others that are beyond your control. The type of car you drive, the purpose of the car, your driving record, credit, house ownership, your age and gender, and where you live and drive can all have an impact on the cost of your auto insurance.


Even your marital status can have an impact on your insurance costs. According to statistics, married people suffer fewer and less expensive accidents than single persons.

What kind of automobile insurance is right for me?

There are a number of factors you should consider when purchasing any product or service, and insurance is no different.

  • First, purchase the amount of liability coverage which makes sense for you. Liability insurance covers the damages caused by your vehicle, whether bodily injury or property damage. The amount of coverage varies by policy and by the kind of damages covered. Important note: liability does not pay for damages to your or your car.

  • Second, you should decide which optional coverages you want. For example, do you want the optional physical damage coverages in Part D or is the market value of your car too low to warrant purchasing them? If you car is financed or leased, you will have no choice but to purchase this coverage.

  • Finally, talk to our representative about how we can best protect you and on of your most valuable assets.


My kid just got a permit. Do I have to notify my insurance company?

All drivers, whether on a learner’s permit or basic license, are required to comply with the State’s financial responsibility law. As long as the driver in-training has your permission to drive the car, the insurance company should not refuse to pay a claim. However, once a basic license has been issued, you must ask your agent to add the child to your auto policy, unless she or he has her or his own vehicle with a separate policy of insurance on it.

If I am sued because of an auto accident can I lose my house?

Maybe. For example, suppose you have $100,000 in motor liability insurance, are involved in an accident that was your responsibility, are sued, and a jury pays the other party $150,000 in damages. Once the insurance company has paid the policy limit of $100,000, you are personally liable for the remaining $50,000. From the time the judgment is duly recorded, a judgment for that amount entered in the New Jersey Superior Court Law Division serves as a lien against any real estate owned by you in the state of New Jersey.


Furthermore, that lien can attach to property to which you obtain title after the judgment is entered.  You are therefore unable to give clear title to the real estate unless the judgment lien is satisfied. The lien is valid for 20 years and can be extended for another 20 years by petitioning the Court. Furthermore, a judgment creditor in New Jersey may garnish your wages until the debt is satisfied. Although you cannot be forced to sell your home by a creditor, a wage garnishment may make it hard for you to pay your mortgage, leaving you with no choice but to sell.

Consider insuring yourself appropriately with appropriate limits and purchasing an umbrella insurance. More liability insurance is often inexpensive in relation to the danger of being underinsured. Inquire with our representative about an umbrella coverage. It could save you a lot of trouble later on.

What are the coverages I need to consider for my motorcycle?

There are several. The State of New Jersey requires that all motorcycle operators carry minimum liability coverage of $15,000 for bodily injury per person, $30,000 bodily injury per accident and $5,000 property damage per accident. Higher limits can be purchased. Other coverages to consider: fire, theft, comprehensive and collision, accessory coverage for customized parts and equipment, paint, helmet coverage, safety apparel and trip interruption, and roadside assistance.

What is flood insurance?

Many flood insurance related questions may be answered by visiting You may use the tools under the Insurance Center to determine policy coverage, estimate rates, and find an agent in your area.

What is the difference between actual cash value (ACV) and replacement cost coverage?

Actual cash value is determined by obtaining the replacement cost for an item of like kind and quality minus depreciation, which is usually expressed in a percentage. For example, your LCD HDTV which you purchased in 2009 was destroyed by fire. To figure out how much you would receive from your insurance company, you would see what the cost would to replace that TV and then subtract the depreciation. In this example, electronics are typically depreciated by 10% for each year owned. So if the replacement cost of a like kind and quality TV is $500, then, after subtracting 10% for depreciation, you would receive $450. Replacement cost coverage is just that – the cost to replace the item with one of like kind and quality without any deduction for depreciation. So in the above example, you would receive the TV’s replacement cost of $500.

Can an insurance company cancel my auto or homeowner’s policy?

Yes. For auto policy, they have the right to terminate if the consumer fails to pay the payment or if the consumer's license is suspended or revoked during the policy's term. For homeowner's policy, they can terminate if the customer fails to pay their payment, if there is fraud or severe misrepresentation when completing the insurance application, if the consumer is convicted of a felony, or if improvements to the property are done that enhance the risk of loss. Within 60 days of the new policy's issuing date, an insurance provider can terminate it for nearly any cause.

Is it possible for a company to refuse to renew my auto/homeowners policy?

Yes, for nearly any reason, a company can refuse to renew a policy. An insurer is required to provide you with 30 days' notice as well as the exact reason for their refusal to renew.

Should I Insure My Personal belongings?

What would it cost to replace your home's contents with new stuff if everything was destroyed? Add up the costs of everything from home gadgets to furniture to tools to clothing — you might be startled by the amount. The current cost of a similar, new item is covered by replacement coverage. You would only be compensated for the real monetary worth of the used item if you did not have replacement coverage.

Do I need renter’s insurance?

Renter's insurance will protect you if your furniture, gadgets, books, or other items are damaged or destroyed. Renter's insurance will also protect you if someone is harmed in your flat or someone's personal property is damaged and sues you.

Do I need renter’s insurance even if my landlord has insurance?

Yes, even if your landlord has insurance, you need renter's insurance. Although your landlord almost definitely has property and liability insurance, it does not cover the objects you store in your apartment and does not protect you if a guest is injured and sues you for liability.

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