Auto Insurance Reform in New Jersey
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On November 21st 2016 I was involved in a car accident. I was sitting in traffic and was hit from behind by a driver who had to be doing about 45 MPH. The driver I was hit by was covered under the New Jersey Special Automobile Insurance Program (SAIP) also known as dollar a day insurance. After some research into this program and some number crunching, it is clear that this program is set up in such a way that it denies all property loss claims, and puts the other driver on the hook for deductibles. I’ll share some numbers shortly.
But first…a history lesson.
SAIP/Dollar a day insurance was first introduced in the State of New Jersey in 2003 as a way to offer auto insurance to people that qualified for Federal Medicaid benefits as a way to give people with limited financial means a way to carry auto insurance. At the onset of this program is was determined that there were roughly 250,000 drivers in the State of New Jersey that would qualify for this coverage.
Followed by a reality check.
The details of the policy seem to convert the privilege to drive into a right to drive and effectively provide a false sense of coverage to the individual covered under SAIP. For a dollar a day the plan covers up to $15,000 of emergency care, $250,000 of catastrophic care, and a $10,000 death benefit for the insurance holder. There is no coverage for property damage whatsoever for the insured, or for the other party’s property in the case of accident.
Now the numbers.
In the State of New Jersey there are roughly 250,000 individuals that qualify for SAIP. On average in New Jersey 1 in 11 drivers is involved in an accident each year. Apply those numbers and you can see that roughly 22,727 SAIP drivers will be in an accident. If you estimate that fault will fall on half that number in an accident you can figure that 11,363 SAIP drivers will be the cause of an accident. This means that quite possibly 11,363 drivers in the State of New Jersey each year will find themselves turning in a claim on their own auto insurance each year. With the average deductible being $500.00 that turns into about $5.6 million collected by insurance companies in New Jersey each year for these accidents.
It doesn’t end there. If you are involved in an accident with an SAIP driver and file a claim with your insurance company, you have as close to zero chance as mathematically possibly of recouping your deductible cost. Add some insult to your injury. The accident gets reported and you say goodbye to trade-in/resale value because it’s gone. On top of all of this, there is no guarantee that your premium rates won’t be increased. So you are out your deductible money, your resale value is shot, and you may well end up having to pay a higher premium….all for being in the wrong place at the wrong time.
What needs to be done?
We do not pick who we want to be involved in a car accident with. It’s a simple solution. An SAIP driver is at fault in a car accident, their insurance company should at a minimum be required to cover the other driver’s deductible for filing an insurance claim. This seems more than fair given that Insurance companies collect roughly $91 million each year for SAIP when compared to the likely $11.3 million dollars in deductibles that collected on claims.
What is the purpose of this petition?
This petition is being created with the intention of gathering enough signatures to let out State lawmakers know we disagree with this law and more importantly that we want change. By providing legal insurance with zero coverage to drivers qualifying for Medicaid coverage the State of New Jersey is requiring fully insured drivers to bear the financial burden while giving SAIP drivers the false mindset that they are properly insured. While all of this goes on, the insurance companies continue to collect money. Voices need to be heard, changes need to be made.
Who should sign this petition?
Anyone in the State of New Jersey with any type of auto insurance can and should sign this petition. If you have SAIP insurance, speak up and sign so that we can let elected law makers know that you are not OK with your auto insurance NOT covering the out of pocket deductible expense that other drivers must pay in the event of an accident. If you carry liability, or comprehensive coverage, sign to let your elected law makers know that you are NOT OK with the State of New Jersey allowing auto insurance policies that cover almost nothing and shift financial burden and responsibility to properly insured drivers.
Let your voices be heard.
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