Are you trapping yourself with basic New Jersey auto insurance?

If your morning commute involves congested freeways and reckless drivers, you may want to review your auto insurance coverage. A basic policy, might save you money in the short term, but leave you with stuck with medical bills you can’t afford to pay.

That was the takeaway from a recent New Jersey Supreme Court ruling. Justices voted 3-2 to block victims of auto accidents from presenting evidence of medical expenses beyond their policies’ personal injury protection (PIP) limits.

Why it pays to keep your options open

New Jersey is a “no-fault” state, meaning that drivers turn to their own insurance companies for compensation for damages, medical bills and other expenses.

The system works well when costs stay below your policy’s coverage limits. But drivers often suffer injuries that lead to medical costs far above the state’s $15,000 minimum coverage. This is where you can get stuck.

If you opt for a basic policy or a standard policy that limits your right to sue, your insurance does not need to pay beyond your cap, and you cannot seek compensation from the other driver.

In the case brought before the Supreme Court, both plaintiffs had opted for basic policies with $15,000 limits on personal injury protection. One required medical treatment that ran $28,000 over his policy. The other required treatment that ran $10,488 over her policy. Because they chose policies that limited their options, these plaintiffs must now deal with not only their injuries, but their debts as well.

On the other hand, a standard policy that leaves you the right to sue may come with a higher premium, but it leaves you the right to seek compensation for your medical bills after an accident. Given the rising costs of healthcare, this becomes an increasingly important consideration, especially for commuters who watch reckless drivers swerve through the lanes ahead of them every day.

Are you gambling with your health?

Few things in this world are as important to you as your health. If you’re ever injured in an auto accident, you need to get better. Very likely, this will involve medical treatment, and doctors do not come cheap.

When you buy your auto insurance, you’re doing more than paying for the right to drive your car. You’re placing a value on your health. You’re betting that you won’t get hurt, or that if you are involved in an accident, your injuries will be less than $15,000 to repair. For most, that’s a gamble they cannot afford to lose.

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