NAMED EXCLUDED BASIC POLICY DRIVER What coverages does the basic policy provide? A basic policy offers $15,000 in personal injury protec- What does it mean to exclude a driver from tion coverage and includes up to $250,000 of medical my policy? benefits coverage for catastrophic-type injuries, If there is a vehicle on your policy that certain $5,000 property damage liability and an option to driver(s) do not drive, you can exclude those purchase $10,000 of bodily injury liability coverage. driver(s) from being covered for certain insurance If you purchase a basic policy, you cannot purchase coverages on that vehicle. The excluded driver(s) will not have collision or comprehensive cover- uninsured/underinsured motorist coverage. Companies can, at their option, also offer to sell collision and The Most age if they drive that vehicle. Frequently Asked What happens if an excluded driver uses a vehicle from which they have been excluded? If the “named excluded driver” operates a vehicle that he/she has been excluded from, and is involved in an accident there are no physical damage coverage benefits (collision or comprehen- sive). The vehicle would continue to be covered under the liability and personal injury protection coverages regardless of who drives the car. Does the excluded driver provision apply to the rest of my policy too? Only physical damage coverage benefits (collision or comprehensive) would not be available for the “excluded driver” on the specific vehicle designated by you. The vehicle would continue Y comprehensive coverages with this type of policy. NEW THRESHOLD TO LIMIT LAWSUITS What are the changes regarding my right to sue for pain and suffering? Since 1989, New Jersey policyholders have been able to choose between Bodily Injury Liability coverage with a Lawsuit (or Verbal) Threshold and a No Threshold option. Your selection of one of these thresholds determines your ability to sue for “pain and suffering” for injuries you sustain in an auto accident. To reduce the number of non-serious and frivolous Questions About Auto Insurance Reform Y to be covered under the liability and personal lawsuits, a new “Limitation on Lawsuit” Threshold will injury protection coverages regardless of who replace the present Lawsuit Threshold. The new drives the car. threshold allows you to sue for “pain and suffering” should someone else injure you in an accident and Why would I want to exclude a driver from the injuries are: serious injuries which your physi- my policy? cian certifies are permanent in nature or result in By doing so, your comprehensive and collision death, dismemberment, loss of a fetus, displaced premiums on that car would not reflect this fracture, or significant disfigurement or scarring. person’s claim experience, driving record and rating classification. You may be able to reduce your premiums by excluding certain drivers V from driving specific vehicles. Insurance Council of New Jersey & New Jersey Insurance Education Foundation 820 Bear Tavern Road, Suite 303, Ewing, New Jersey 08628 609/882-4400 Learn more about auto insurance reform at the following web sites: www.icnj.org and www.njautoreform99.com MANDATED RATE REDUCTION When will I get my 15% reduction? or after March 22, 1999 will contain the new policy vehicles insured and/or the number of drivers The Automobile Insurance Cost Reduction Act options and reflect the mandatory rate reduction. covered by the policy. Others may see an increase requires insurance companies to reduce their This means that if your policy expires in the later because of tier rating. The law mandates that rates for a variety of insurance policy coverages. part of April 1999, your renewal policy will likely implementation of tier rating be “revenue neutral.” Beginning March 22, 1999, insurance companies contain the new policy options and reflect the This means that an insurer cannot collect more will begin collecting approximately $700 million mandatory rate reduction. in total premium from their policyholders less in auto insurance premiums. The actual rate because of tier rating. However, the distribution 3. If you wish to change your policy before its of the premiums charged will change. According reduction for individual policyholders will vary scheduled renewal to take advantage of the depending on a number of factors including policy to the Department of Banking & Insurance, the new reforms, you can do so after April 21, 1999. rates charged for approximately 53 percent of all changes, levels and types of coverage purchased Simply contact your insurance agent or insurance and number of drivers on a policy. vehicles insured will remain the same or decrease. company. They will advise you on how to request When will the automobile insurance policy for this type of change. Some companies have Tier rating should not be confused with the choices and lower rates be available? special forms that you will need to read and fill mandatory premium rate reduction that will out. Remember that there are millions of auto begin on March 22, 1999. The rate reduction There are three ways you can benefit from the X implementation of the various reforms and the mandatory rate reduction: 1. Purchase a new automobile insurance policy after March 22, 1999. All policies sold after this date will contain the new policy options and reflect the mandatory rate reduction. 2. Automobile insurance policies that are processed for renewal by your insurance company on MEDICAL TREATMENT PROTOCOLS AND DIAGNOSTIC TESTS Will my medical care for auto accident injuries be handled differently? In an effort to combat tens of millions of dollars of fraud and abuse in the state’s auto insurance system, the reform law required the New Jersey Department of Banking & Insurance to establish insurance policies and there are likely to be a high number of customer inquiries and requests for policy changes. Why have some people’s rates increased even though they are supposed to get a decrease? Some people will see an increase in their premium because of a number of factors. These include amounts and types of coverage chosen, changes in the value of right to choose his or her own physician. Will my physician lose the ability to exercise independent judgement? No, your physician and other health care professionals will determine the medical necessity of treatment. Disputes that arise can be resolved by an indepen- is part of a reform law (Automobile Insurance Cost Reduction Act or AICRA) that became law in May 1998 and will reduce premiums by approximately $700 million. For more information on tier rating, call the Insurance Council of New Jersey at 609/882-4400 or visit www.njautoreform99.com on the Interent. OPTIONAL LOWER PIP LIMITS What happens if I choose lower PIP limits and I am involved in an accident that incurs medical bills in excess of my coverage? Your policy will only cover you up to the limit you select and you would be responsible for paying the rest of the cost of medical treatment except in cases of certain catastrophic injuries where guidelines for the standard treatment of injuries dent medical review board physician, not insurance sustained in automobile accidents. company employees. your policy would provide up to $250,000 of medical coverage. After months of research and dialogue with state What if my physician or I disagree with the boards that license various medical professionals, treatment authorized by my insurer? What if I don’t choose any of these lower the Department approved a set of medical treatment Disputes regarding medical treatment provided limit options? guidelines and a list of valid diagnostic tests. The under PIP may be submitted for dispute resolution. If you do not choose any of the lower limit coverage new rules ensure that injured auto accident victims A professional arbitrator will review your dispute. options, you will automatically be given the receive prompt medical treatment from responsible You or your insurance company have the option of standard $250,000 of personal injury protection medical professionals while adding reasonable requesting a review by an independent medical or “no-fault” medical benefits coverage. controls to prevent widespread fraud and abuse. review board. Guidelines established by the Emergency medical treatment is not affected by Department of Banking & Insurance assure swift the guidelines and it remains the policyholder’s action on medical treatment disputes.
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