Why is NJ insurance premiums the highest in the nation?

Population, high car density, labor costs, lawsuits, car theft

How do insurance companies determine your premium?

• Type of coverage • Amount of coverage • Driving experience• Type of car• Where you live• Where you drive• How much you drive• Your grades• Driver training• Driving record.

Why get insurance?

• To protect your assets

Assets:

Possessions (House, cars, boat, savings, stock, bonds….)

Appreciation/Depreciation

• Appreciation: When the value of something goes up. (Houses and properties when the economy is strong)

• Depreciation: When the value of something goes down. (Most cars)

Policy

• The written agreement between you and the insurance company.

Premium:

• the amount of money you pay the insurance company for coverage.

Liability (split limits) :

• pays for damages to others injured by you and property damage other than your own.

• This type of insurance that is mandatory in New Jersey

Collision:

• pays for damages to your own car that occurs due to an accident.

Deductible:

• You agree to pay a certain amount before the insurance company pays.

• The higher the deductible the less you pay for the premium.

This is part of your collision coverage or PIP.

Comprehensive:

• covers damages to your car due to vandalism, theft or “Act of God”.

Personal Injury Protection:

• This will pay for medical expenses due to a single car accident or the person that hit you did not have enough coverage.

Income Protection:

• This will allow you to collect part of your salary if you are out of work for an extended period of time.

Uninsured Motorist Protection:

• This protects you if you are in an accident with someone who does not have insurance.

Surcharge:

• These are additional charges to your insurance cost that you will receive for moving violations and accidents.

–DUI / $1000 each year for 3 years

–Refusal of Breath Test

–Driving without insurance

–Driving with a suspended license.

Split Limits of Liability

• Example: 15/30/5

• 15 (first #) Bodily injury per person up to $15,000

• 30 (second #) Bodily injury per accident up to $30,000

• 5 (third #) Property damage $5,000

You are in an accident where you hit another car with 3 people in it. One person has medical bills of $20,000. The other two people

have medical expenses of $8,000 and $2,000. The car had $4,000

worth of damage and you also hit a fence that cost $2,000 to replace.

Split Limits 15/30/5

• Policy Cost You

• Most injured:

• Other injuries:

• Damage car:

• Damage fence:

• Total Paid: