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What are the Dangers of Being Underinsured? | 877-249-4600

What are the Dangers of Being Underinsured?


There are a lot of bills that go hand in hand with modern life: wireless service plans for cell phones, car payments, and car insurance. These are all monthly costs many of us must build into our budgets. That does not mean we think the costs are reasonable, just that we must pay them to continue living and working today.

With all these bills, consumers are naturally looking for ways to reduce costs. Popular insurance programs, many of them with humorous advertising campaigns that grab the attention of anyone concerned about cutting down expenses, promise low-cost coverage options.

However, as with many things in life, if a deal looks too good to be true, it usually is.

Many times, the low-cost auto insurance being advertised is a basic policy, and although that meets the state requirements, it may leave the consumer vulnerable if a car accident happens. Although auto insurance is mandatory in New Jersey, uninsured motorist coverage and underinsured motorist coverages are not. They can be added onto a policy. However, this coverage does also cost more.

According to financial information service WalletHub, purchasing an auto insurance plan with uninsured/underinsured motorist coverage is a wise investment if you can find an affordable plan.

To bolster its point, WalletHub offers the sobering statistic that about 15 percent of drivers do not have car insurance, making for a one in seven chance that the other driver in a two-car accident is uninsured.

Because car accidents are expensive, if the other driver does not have enough coverage or does not have insurance, it can be time consuming and difficult to sue them for funds to cover any bills. Given that car accidents happen every day all over the state, the added cost of uninsured/underinsured motorist insurance really can help save drivers time and money.

Pay More in Premiums or Pay More Later

Even when a driver chooses coverage for uninsured and underinsured motorists but chooses a plan with low limits to control the premium cost, that driver may come across unexpected bills from an accident, the state advises.

The New Jersey Department of Banking and Insurance explains the problem of cheaper insurance on its website.

An example from the state: Person A is involved in a car accident with a driver, Person B, who has $5,000 worth of coverage. Person A has $10,000 worth of damages, so they submit for the remaining $5,000 to be covered by their insurance carrier under Uninsured/Underinsured Motorist coverage. If the insurance company determines in its investigation that underinsured Person B was 80 percent at fault and Person A is 20 percent at fault, Person A will be entitled to a total of $8,000 reimbursement for the $10,000 loss. This results in a $2,000 loss, plus the deductible.

Put another way, buying a policy that offers adequate underinsured and uninsured motorist coverage is a method to control the potential costs of a car accident.

Coverage a New Jersey Driver Must Have

New Jersey drivers must carry at least the following coverage:


  • Bodily injury liability. This provides at least $15,000 coverage for each person and at least $30,000 coverage for all people injured in auto accidents that you cause.

  • Property damage liability. This provides at least $5,000 coverage for property damaged because of an auto accident that you cause.

  • Personal injury protection (PIP). This provides at least $15,000 coverage per person per accident for anyone covered under your policy.


New Jersey is a No-Fault Car Insurance State

The Garden State runs under the no-fault insurance protocol. No-fault insurance means your policy pays for your own injuries and vehicle damage, no matter who caused the accident.

However, that does not rule out people seeking compensation for injuries and property damage that occurs from an accident. Although the state requires auto insurance for all drivers, injuries and damages may go beyond the driver’s insurance coverage. The state only requires basic insurance, which may not meet the expenses from the incident.

Comparative Negligence in New Jersey

Another aspect of New Jersey car accident laws is comparative negligence, which has advantages and disadvantages for compensation.

The good aspect is that if a person is deemed partly responsible for an accident, they may still be able to get some money awarded to cover the damages, but it will be lessened by the percentage at which they are found guilty.

However, if you are found to be more responsible for the accident than the other driver, you cannot recover any financial settlement or personal injury award.

The Personal Injury Statute of Limitations

All states have a limit on how long a person has following an accident to bring a lawsuit. New Jersey’s statute of limitations for personal injury claims is two years. There are exceptions to this rule, and an experienced lawyer can help.

When a person has spent a significant amount of time trying to get compensation for an accident, it may be time to seek that compensation via the courts.

Reporting the Accident

New Jersey law requires that any vehicle accidents that result in injury, death, or property damage over $500 be reported to the police. Beyond the 911 call, there is a written report required by law.

Of course, there are accidents in which making that phone call is unlikely, and the written report is even less likely. Another person in the car can make the call, and police reports can take the place of the written report.

Highland Park Car Accident Lawyers at the Law Offices of Harold J. Gerr Secure Justice for Accident Victims

If you or a loved one has been injured in a car accident involving an uninsured or underinsured driver, reach out to the Highland Park car accident lawyers at the Law Offices of Harold J. Gerr. We have protected the rights of personal injury victims in central New Jersey since 1975. We will examine the cause of the accident and fight to secure the compensation you deserve. Call us today at 877-249-4600 or 732-537-8570 or contact us online for a free consultation. Located in Highland Park, New Jersey, we serve clients in New Brunswick, Somerset, Piscataway, Edison, South River, Sayreville, Metuchen, East Brunswick, South Plainfield, Fords, Middlesex, Old Bridge, Iselin, Bound Brook, Perth Amboy, Colonia, Elizabeth, and Newark.

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