Buying insurance can seem like a necessary evil. New Jersey requires you to have it, and it is beneficial if you are in an accident, but it is also something you do not want to pay and hope you never need.
For many, the temptation is to purchase the least expensive plan and hope it is enough if you are in an accident. However, getting the cheapest option may mean missing out on valuable coverage.
Here’s what you should consider when choosing a car insurance plan.
Can you cover the deductible?
Choosing a plan with a higher deductible can help you lower your monthly payments. Still, before you opt for a smaller bill, you should consider the deductible for covering your accident.
If you have a higher deductible, you will have a higher cost before your insurance kicks in. Typically, a higher deductible is not a good risk if you would not have the deductible amount available in an emergency.
Understanding basic vs. standard coverage in New Jersey
According to state law, you must maintain at least basic coverage on your vehicle. While the cost of coverage will change depending on the carrier you choose, according to New Jersey law, a basic policy only includes property damage liability and personal injury protection.
However, many carriers will include other types of coverage as an option, such as:
- Bodily injury liability. Covers people with injuries when you cause an accident.
- Uninsured/underinsured motorist coverage. When you are in an accident, and the other driver does not have sufficient coverage, this can provide property damage or bodily injury coverage.
- Collision. Covers damage to your vehicle if you are in an accident.
- Comprehensive. When your vehicle has damage from a non-accident event such as theft, vandalism or flooding, this type of coverage can help pay for the damage.
Keep in mind, for insurance plans that offer coverage over the basic coverage, there are often different levels. You should look at the value of your vehicle and your life situation to determine what coverage you need.