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The rate of traffic accidents in New Jersey has grown over the years. With over 6 million drivers, it’s no surprise that New Jersey had over 200,000 crashes in 2019. With such a high number of high-risk drivers in the state, and because minimum auto insurance is mandatory in the Garden State, the New Jersey Assigned Risk Plan was developed to address both concerns. Ultimately, this plan was designed to help high-risk motorists with low credit stay insured.
New Jersey Personal Automobile Insurance Plan (NJ PAIP)
Discovery cheap auto insurance for high risk drivers may be more nuanced in some states. And if your credit rating is bad or if your driving history has a few negative ratings, it is possible to be rejected by some insurance companies. This is why the New Jersey Assigned Risk Plan was created in 1992. Also known as the New Jersey Personal Automobile Insurance Plan (NJ PAIP), this government initiative is intended to provide motorists in the state with auto insurance when they have been denied by private insurers because of their credit rating or driving history.
Keep in mind that the NJ PAIP is not an auto insurance agency. Rather, it is a program that matches drivers with insurance companies for adequate coverage, also called “assigned risk plan”.
Who is eligible for the NJ PAIP?
As with most state sponsored insurance programs, to be eligible for the NJ Assigned Risk Plan you must first provide proof that you have not purchased regular insurance – at least twice in 60 days. Only those who have been denied all other insurance options can apply for PAIP NJ.
Other eligibility conditions include:
- New Jersey resident and licensed driver
- Vehicle registered in New Jersey
- License suspended for non-insurance
- Need for insurance to reinstate license
Your credit score doesn’t matter in applying for PAIP (although it can be a contributing factor to your premiums in some cases), but there are some factors that can still make you ineligible, such as:
- Invalid driver’s license
- History of auto insurance policy lapses or non-payment of premiums
- Retention of information in the application
If you are refused once by PAIP, you are free to reapply if the ineligibility factors no longer exist.
What type of coverage is available with the NJ PAIP?
Under the New Jersey Assigned Risk Plan, drivers can choose between a basic policy and a standard policy, with the former offering fewer coverage options than the latter. The basic policy does not include bodily injury in the minimum coverage but the additional offer, up to a maximum of $ 10,000 per accident. Property damage coverage of $ 5,000 per accident and personal injury protection of $ 15,000 per person per accident are also included in the basic plan. Basic standard policy features include bodily injury coverage, property damage coverage, personal injury coverage, uninsured motorist coverage, and collision and full coverage.
High-risk auto insurers associated with the New Jersey Assigned Risk Plan are required to provide coverage to qualifying drivers for three years. After this period, if you are still a high risk driver and do not purchase regular insurance, you will likely be able to apply for PAIP again. However, coverage options may differ from one insurance provider to another. Therefore, comparing the available options will give you the best idea of what will suit your needs and budget.
How Much Does Auto Insurance Cost With The New Jersey Assigned Risk Plan?
High risk auto insurance is generally more expensive than general market options and the NJ Assigned Risk Plan is consistent with this trend. Depending on the plan you choose, you may need to increase coverage limits to meet the state’s minimum requirements. Your premium will also depend on the factors that individual insurers assess in setting a price for you, which may include your zip code, age, type of vehicle, and marital status, among other variables.
NJ PAIP offers two payment options: you can either pay the full annual premium in full at the start of your policy, or choose to pay a 30% down payment up front and the rest in installments over the next few months. If you are insured under this program, you are not required to remain insured if you are eligible for a cheaper policy somewhere else. You are free to cancel the policy and your remaining premiums will be refunded to you. However, make sure your replacement policy is in force before you terminate your NJ PAIP plan to avoid forfeiture of coverage.
How to buy insurance from NJ PAIP
For the most precise quote, visit official site of the NJ PAIP and complete the form. The information you provide will be used to determine how much you can expect to pay for insurance and will also be matched with a high-risk insurer, so it’s important that you provide as much detail as possible.
The company that the NJ PAIP assigns to you must commit to providing you with insurance for the next three years, regardless of your driving history. Unlike buying regular auto insurance, your options are likely to be quite limited when it comes to high-risk insurance providers, so the three-year obligation can potentially be a huge plus.
Alternatives to NJ PAIP
New Jersey is a faultless state and seeks to ensure that low cost insurance is available to help drivers of all walks of life stay insured. There are ways to get high risk insurance without state sponsored programs if you look in the right places. If you have an imperfect driving history or little or no credit, you have the following options in New Jersey in addition to the assigned risk plan:
- Special automobile insurance policy (NJ SAIP): Another government program but intended only for those on Medicaid with hospitalization. Also called New Jersey Dollar Daily Auto Insurance, it only provides medical coverage for emergency care after an accident.
- High risk insurance companies: It is possible to find insurers that accept high-risk drivers, although you may need to do your own research to find which ones you will be eligible for coverage with, and the three-year guaranteed period of coverage does not apply. would not necessarily apply. In New Jersey, insurers are not allowed to use credit scores to determine premium. Most national insurers also have different coverage options for motorists with DUIs, accidents and other offenses on their record.
New Jersey laws aim to give every motorist access to auto insurance. By gradually improving your driving record, you may become eligible for various discounts offered by most insurers that may reduce annual premiums in advance or over time. Otherwise, you might be able to get insurance through state-sponsored initiatives.
Frequently Asked Questions
What is the best auto insurance company?
No company can claim to be the best because insurance is highly personal and subjective. However, some of the best known insurance companies on the market are the ones that offer the most winning combination of affordable prices, great customer service, discounts and coverage options.
What insurance do i need in New Jersey?
The minimum required auto insurance in new jersey is personal injury coverage of $ 15,000 per person and $ 30,000 per accident and property damage coverage of $ 5,000. Drivers must also carry $ 15,000 in personal injury protection, $ 15,000 in uninsured / underinsured motorist insurance for bodily injury and $ 5,000 for property damage.
How to save on car insurance?
Choosing an affordable provider (one that offers the coverage you need) and taking advantage of discounts are two of the most recommended ways to save on insurance premiums. Most insurers offer some of the basic discounts for good driving habits, owning your home, bundling policies, having a safe vehicle, and being a loyal customer. However, if high risk drivers should contact suppliers directly to get a better idea of the discounts they can actually claim.
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