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Friends and Family, 

We over at Voto & Cavalli realize how important it truly is to understand what you are buying when you purchase insurance. Your insurance serves three major purposes. First, to protect other people from you, your liability coverage. Second, to protect yourself from others, your uninsured/underinsured motorist coverage. And finally, to pay for your medical bills if you are injured in an accident.

We are so sensitive to how expensive insurance has gotten in NJ. The prices are very high and, as a result, drive the choices many of us make for our policies – but if you are making these choices without knowing the implications, you may be doing more harm than good.

We want to ask each of you to check your policies (or contact one of us to go over it with you!) to make sure you have coverage that is appropriate for you and your family.

1. Your PIP (personal injury protection – the medical coverage) should be listed as PRIMARY (unless you work for the State of NJ, then you can be health insurance primary – more on that in a second!) and should have the highest dollar amount of coverage you can afford. If you can make it work, get the full $250k available – if you are injured in an accident and only have $15,000 of PIP coverage after it’s exhausted, YOU are responsible for making sure the bills for your treatment get paid, not the liable party. NJ is a no-fault state, which means medical bills are paid by the party receiving the care regardless of who caused the accident.
   1. Health Insurance Primary Policies – unless you work for the STATE (not the Federal Government, not the City Government), you should not elect this policy. So few insurance policies are not ERISA policies. ERISA is an acronym, but the most important takeaway is that with those policies, you pay back every dollar your insurance spent on your care related to an MVA.
2. Your Bodily Injury Liability Limits (BI) – this part protects other people from you should you cause an accident. You want to plan for what you want protected when choosing coverage, so if you own a home, you may want to elect higher coverage limits. The limits start at $25/50k ($25,000 per person, $50,000 per accident – so if two people in the car each could recover a maximum of $25k, but if there were 4 people in the car, the max for any single person could recover is $25k but the total recovery of all 4 people couldn’t exceed $50k) and go as high as $1million dollars, depending on the carrier. If higher premiums for this are outside your budget, you may want to consider an umbrella policy (which would also cover your home should someone be injured there, they can be lower in price for the year and provide extra coverage). Property Damage Liability limits – this is how much your carrier will pay out for a vehicle you damaged (or even a telephone pole, etc.) so bear in mind that most cars now exceed $50k, and that the non-liable party can sue you personally for the amount not paid by your insurance.
3. Your uninsured/underinsured motorist coverage (UM/UIM) – this part protects you from other drivers, for example, drivers who have lower limits, no coverage at all, or dollar-a-day policies. These limits can’t be higher than your Bodily Injury Liability Limits (you can’t choose to protect yourself more than you’d protect someone else). These limits should NEVER be lower than your liability limits discussed above. It doesn’t matter what kind of crazy savings tactic they try to talk you into, this will only ultimately cost you.
   1. As an example, we had a case where a client carried BI Limits of 300k combined single limits (CSL – means no separate property damage coverage), but UM/UIM of only 15/30k; it saved him maybe $75 for the year but ultimately when he was catastrophically injured, cost him the extra money he would have been able to recover from his own policy.
   2. This provision allows you to collect for injuries or property damage sustained when the other party cannot be identified or does not have sufficient coverage to make you whole as a result of the loss. Your insurance company gets a credit for the available insurance on the other side, and you are potentially eligible for the remainder (depending on the injuries sustained, treatment received, etc.). For example, if the defendant has a 25/50k policy (state minimum for regular insurance) and you have 100/300k, you are eligible for an extra 75k from your own policy of insurance (again, depending on your injuries and treatment). If you only have the lowest coverages, you typically cannot tap into this additional path for recovery for your injuries.

If you’ve made it to the end of this piece of paper – thanks for reading along! We know this is a lot of information, but we just want to make sure you know how to best protect yourself. The world of insurance can be very confusing.

Please note that this article is not legal advice. Before making your choice of attorneys, you should give this matter careful thought. The selection of an attorney is an important decision. Results may vary depending on your particular facts and legal circumstances. If this letter is inaccurate or misleading, report same to the Committee on Attorney Advertising, Hughes Justice Complex, P.O. Box 970, Trenton, NJ. Jessica L. Voto, Esq. with an office located at 213 South Avenue East, Cranford, NJ 07016, 908-272-7300 is responsible for this content.