6.2a Workfile - Basic vs.

Standard Policy
This assignment will review the difference between the basic and standard auto policies available in New
Jersey. Please do not cut and paste your answers points will be taken off for this. Please put your
answers in your own words.
Visit the website for the State of New Jersey !ivision of "anking # $nsurance %link below&.
"asic Policy' http'((www.state.n).us(dobi(division*consumers(insurance(basicpolicy.shtml
Standard Policy' http'((www.state.n).us(dobi(division*consumers(insurance(standardpolicy.html
Use the websites given to review basic vs. standard auto policies in ew !ersey and answer the
following "uestions in detail. #each "uestion is worth $ point%
+. $s bodily in)ury liability coverage re,uired in the basic policy for New Jersey-
No
.. $f a policyholder with basic coverage is paraly/ed in a car accident and only has basic coverage
what is the ma0imum amount his(her car insurance will pay for medical bills under P$P personal
in)ury protection-
1p to 2+3444 but under circumstances such as paralysis up to 2.34444
5. 6 policyholder with basic coverage broke their leg in a car accident and incurred medical costs of
2.4444. 7egardless of fault how much would the policyholder be reimbursed for medical costs
and under what type of coverage-
The policy holder will be reimbursed at least 2+3444 dollars in each policy and up to full
cost depending on the amount chosen under your standard policy
8. !oes the basic policy include uninsured motorist coverage-
No
3. 6re collision and comprehensive insurance covered by the basic policy- "y the standard policy-
"y some insurers under the basic policy
6vailable as an option by all insurers
9. !escribe the bare minimum auto insurance is re,uired by the State of New Jersey in a basic
policy. "e specific with your types of coverage and ma0imum costs per person and(or accident.
Bodily &n'ury (iability )overage* :inimum coverage level is 2+3444 per person and
254444 per accident.
Property +a,age (iability )overage* :inimum coverage level is 23444 per accident.
Personal &n'ury Protection #P&P%* :inimum coverage level is 2+3444.
Uninsured-Underinsured .otorist Bodily &n'ury )overage* :inimum coverage level is
2+3444 per person and 254444 per accident.
Uninsured-Underinsured .otorist Property +a,age )overage* :inimum coverage
level is 23444 per accident
;. $n the standard policy what is the highest limit provided for bodily in)ury liability in an accident you
cause-
1nder a basic policy 2+4444 is the highest limit as an option. $t is not provided. 1nder a
standard policy coverage includes up to 2.34444 per person and up to 2344444 per
accident
<. =hat is the main difference between the basic policy and the standard auto policy- !o not copy
and paste> summari/e your answer into one sentence.
The standard policy includes almost all types of insurances while the basic doesn?t and
the standard policy comes with the ability to customi/e how much insurance you wish to
have.
@. =hich type of policy %basic or standard& do you e0pect costs more- A0plain your answer.
$ e0pect the standard policy to cost more as it includes higher coverage and more type of
coverage than the basic policy
+4. $n your opinion why do most people choose the standard policy in New Jersey-
6lthough more e0pensive it protects you far more in the case of an accident by paying
more than the basic policy can.
++. $n your opinion why do some people decide to choose the basic policy-
The basic policy is cheaper and for homes with low budgets the basic policy is perfect as
it provides enough coverage to fulfil the law
Below are so,e scenarios / please read and answer the "uestions below.
+.. Jose is +< years old and )ust bought a +@@9 Toyota. Bis finances are very tight so he purchased a
basic policy with no additional coverage options. 1nfortunately Jose skidded on the ice and
drove his car into a parked car on the street. The other car was seriously damaged and it will
cost 29444 to fi0. Jose?s car is completely totaled. $t will cost 2.444 to replace Jose?s car.
+5a. =ill Jose?s basic policy cover the cost of the damage to the other car- $f yes please
name the type of coverage used and how much will be covered.
Ces under the property liability coverage up to 23444 dollars. Jose will have to
pay 2+444 dollars out of pocket.
+5b. =ill Jose?s basic policy cover the cost of replacing his own car- $f yes please name
the type of coverage used and how much will be covered.
No as collision is not covered.
+5. :adison has the basic policy on her +@<@ Dand 7over with no additional coverage options. She
recently drove the car on a trip to Elorida. !uring the trip her car blew a tire and rolled over. She
was in)ured in the accident but no other cars were involved. :adison was airlifted to a trauma
center with a spinal cord in)ury. =hen the car rolled over it also significantly damaged a fence in
a person?s yard %cost of 2.444 to repair&. :adison?s car is totaled and it will cost 25444 to
replace.
+8a. =ill :adison?s basic policy cover the cost of airlifting her to the trauma center- $f
yes please name the type of coverage used and how much will be covered.
Ces under personal in)ury protection it will cover 2.34444 dollars of any medical
e0penses
+8b. =ill :adison?s basic policy cover the cost of replacing the fence- $f yes please
name the type of coverage used and how much will be covered.
Ces under property damage liability it will cover up to 23444 dollars
+8. :arty has a .445 :itsubishi with a basic policy. Be was in a car accident with an uninsured
driver. :arty broke his leg and his car had 2+@44 in damage. The accident was not :arty?s fault.
The other car also sustained damage and the driver was in)ured.
+3a. =ill :arty?s basic policy cover the cost of medical treatment for his broken leg- $f
yes please name the type of coverage used and up to what limit will the medical costs be
covered-
Ces under P$P for up to 2+3444
+3b. =ill :arty?s basic policy cover the cost of medical treatment for the other driver-
Please name the type of coverage used and how much will be covered.
No
+3c. =ill :arty?s basic policy cover the 2+@44 cost of fi0ing the other driver?s car- Please
name the type of coverage used and how much will be covered.
No
+3d. =ill :arty?s basic policy cover the cost of fi0ing his own car- Please name the type
of coverage used and how much will be covered.
No