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March 13, 2014

In NJ driving without insurance is illegal

In NJ, Driving without Car Insurance is Illegal, dangerous and stupid.


Just the other day an article in a NJ newspaper estimated that close to 30% of all drivers on NJ roads were driving without Insurance. And NJ Drivers wonder why they pay so much?  Drivers still ask and blame insurance companies for the higher rates. So who pays the costs of all these uninsured drivers?
We do! You and every responsible driver in the state who pays their bills… unfortunately in Our present world of entitlement, politics are affecting Auto Insurance Rates and we all pay more than we should.


Times are indeed tough.  And Insurance rates are going up.  The US Government reports stable inflation, but on a closer look rising prices seem to be masked. They just aren’t being reported. The quantity and quality have dropped. Just look at items the next time you shop. Have you noticed the smaller sizes of items, take cereal for example. The price per package may be the same, but the size has been reduced. Packages used to be 16 oz, then 14, and now 8.9 oz package are the norm.  A one pound of Coffee use to be standard, now the can is less than 11 ounces. Go to Burger King or McDonalds, A serving of fries has shrunk, a 99 cent package is still 99 cents, but upon inspection, you may notice its half of what it used to be. So while the Commerce Department may report stable prices, in the world where most of us live, we are getting less for our dollars.


So what does this have to do with insurance?  Well in tough times, most of us make decisions about where our dollars are spent. We can’t just float more debt like Uncle Sam. We cut back, we eliminate things, not necessarily the things we want, but the things we need. People always will pay more for things they want. Items they desire, like a new cell Phone, a new I Pad, new clothes, a new Car, a Star Bucks coffee. But items we consider a bill like life insurance, car insurance, Home insurance, the mortgage, they wait for another day. But sometimes, another day brings its own bigger problems. People get into accidents, people get hurt and People die, and it’s the families who are left behind that end up taking care of the problems, the mistakes, the consequences.


Driving in NJ is a serious offense and carries severe penalties:

The New Jersey Compulsory Motor Vehicle Insurance Law is found at N.J.S.A. 39:6B-1. This law states that every owner of a registered vehicle is required to carry liability Insurance ….N.J.S.A. 39:6B-2 provides that any owner or registrant of a motor vehicle required to carry insurance under 39:6B-1 who operates or causes to be operated a motor vehicle upon any public road or highway in the State without such insurance is in violation of the statute.
A first time violation of NJSA 39:6B-2 (driving without liability insurance) includes a fine of at least $300 and up to $1,000.00 community service, DMV surcharges of $250 for three years, and a mandatory license suspension of one year. There are also court costs and fees that are required to be paid in addition to the penalties listed above. A second offense carries with it a fine of up to $5000.00, a mandatory jail sentence of 14 days, 30 days community service, and a license suspension for two years. A new application for reinstatement to the DMV must be made.


So while the cost of Non-Compliance can be a legal issue, a bigger cost to society is a present issue. No one talks about the un-insured subsidies that these drivers receive. Check the declaration page of your policy; see the cost of Un-insured Motorist coverage? That’s the amount drivers pay for those who get away without paying their own way. Drivers are effectively subsidizing those who don’t pay for insurance. This cost may be several hundreds of dollars every year. For instance: if you drive an old car and carry only liability coverage then get into an accident with an uninsured driver, you will not be compensated for your loss. Your Insurance Company has no responsibility to cover a loss affected by the other driver. The driver will then have to sue the un-insured driver for his loss, thus the cost to litigate can potentially be more expensive than any monies saved by non compliance. The amount you pay for uninsured motorists can help with some expenses, but in most cases with a low cost cut rate policy you will not recover your total loss. Therefore a proper understanding of what your policy does and does not cover is your first line of defense against un-insured drivers. 


Now, if you don’t have the funds needed to pay for your policy then notify your insurance company immediately. Do not neglect the bill and force the company to cancel the bill for non-payment. This will only  affect the cost next time you need a new policy and the new company will penalize you with increased costs. Also some states require insurance companies to notify the DMV and then required you to turn the plates in on your vehicle, failure to surrender your plates could also cause your driving privileges to be suspended and additional fines and penalties can be assessed. Something to think about before you drive…


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You may wish to consult a competent attorney, tax advisor, accountant, or your own financial advisor. EMC Insurance Agency & Financial Services LLC dba I & E Insurance Agency & Financial Services is an Independent Insurance Agency, a Member of the Trusted Choice, Independent Agents of America & PIA contact your own advisors before making any financial decision. Services offered through independent NON-AFFILIATED ENTITIES

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