In New Jersey, sadly the answer is yes. It wasn’t always this way. Up until several years ago, if you owned an operable car, you were required to have car insurance with a minimum of $15,000 in coverage. That all changed when the New Jersey Legislature came up with the brilliant idea of trying to get more drivers “insured” by allowing them to purchase car insurance with NO liability coverage. I know – it’s crazy. The Automobile Insurance Cost Reduction Act allowed the “Basic” and “Special” Policy to be created.
The Basic Policy: Any New Jersey car owner can purchase the Basic Policy, but no one really should. Bodily injury liability coverage is NOT included, but you have the option of paying more and obtaining $10,000 for that coverage. It provides no Uninsured / Underinsured Motorist Coverage. Unless you have no assets, no family obligations, and are not working – DO NOT BUY THIS POLICY. Then again, if you’re reading this blog post or email, you already know that. Purchase a Standard Auto Insurance Policy with adequate coverage.
The Special Policy: Only New Jersey car owners who are eligible for Federal Medicaid with hospitalization can purchase the Special Automobile Insurance Policy (SAIP) at a cost of $365 a year. There is NO liability coverage and you don’t have the option of even obtaining any with this policy. It only covers emergency medical treatment (and treatment of serious brain and spinal cord injuries) for the insured under the policy.
SO WHAT HAPPENS IF I GET INTO A CRASH WITH A CAR WITH A BASIC OR SPECIAL POLICY? IF I GET HURT, CAN I BRING A CLAIM?
Let’s assume the driver of the car with the Basic or Special Policy was at fault in causing the car crash. You must look at your policy to determine whether you have Uninsured (UM) and Underinsured Motorist (UIM) Coverage. That amount should equal the amount of liability coverage you have. If it doesn’t equal it, contact your insurance company or agent and request that it does right away. Obviously, this would have to be done before the crash.
So, if you sustained injuries you can proceed with a claim under your policy via UM (if the at-fault car had a Special Policy) and via UIM (if the at-fault car had a Basic Policy). Because these Basic and Special policies exist, it is really important to have adequate UM and UIM coverage to protect you and your family members.
By: Michael Raff, Esq.