New Jersey Offers Choice No-Fault Insurance Research Paper

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Risk Management and Insurance -- New Jersey's Choice No-Fault Insurance

What is no-fault insurance and what states have no-fault insurance?

No-fault insurance is very much what it sounds like it is: when a driver is insured with No-Fault insurance and has an accident, the insurance company pays for the damages no matter who is at fault. This eliminates the need for a driver whose car has been damaged by another driver to fight with the other driver's insurance company. There are twelve states that offer No-Fault insurance (including New Jersey). Choice No-Fault is very different.

Choice No-Fault insurance is offered in New Jersey, Kentucky and Pennsylvania; "Choice No-Fault" means that the automobile owner has a choice; he or she can go with the state's No-Fault policy, or go with traditional insurance. If the driver does go for traditional car insurance that means he or she can file a liability claim or sue another driver.

In New Jersey (not in Kentucky or Pennsylvania) when a driver takes the "No-Fault" route, he or she can go to court and sue only in certain situations: a) when the accident results in "dismemberment, significant disfigurement or significant scarring"; b) when there are "displaced fractures"; c) when there is the "loss of a fetus"; and d) when there is "permanent injury (other than scarring or disfigurement)" (Ryskamp, 2010).

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The minimum requirements for auto insurance in New Jersey are as follows: one: the driver has to be covered for $5,000 per accident (and that doesn't include what it may cost to replace or repair the insured person's car); two: personal injury coverage must be at least $15,000 "per person per accident"; and three: drivers must carry a policy that provides $250,000 "per person per accident" in benefits when the injury involves brain or spinal cord injuries (Ryskamp).

In addition, a driver in New Jersey can add to his or her policy for bodily injury, for the motorist that is uninsured or underinsured, collision and comprehensive; these are all extras that the state doesn't mandate, but when a car owner can afford to add this coverage it is very smart to do so, Ryskamp explains.

Advantages of No-Fault Insurance in New Jersey

According to Allstate Insurance Company, one of the benefits of No-Fault coverage is that "…medical claims are paid quickly" and those involved in a contentious accident do not have to wait for a lawsuit to….....

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