COMMISSIONER BAKKE LAUNCHES "LAST CHANCE" PROGRAM

TRENTON, N.J. – Banking and Insurance Commissioner Holly C. Bakke today detailed the "Last Chance" program, a way for uninsured motorists to get legal without paying some of the surcharges normally tacked onto the bill.

Under the program, uninsured motorists can save between $115 and $1,300, but they must buy coverage through the Personal Automobile Insurance Plan (NJ-PAIP). "Last Chance" waives underwriting surcharges for being uninsured only; all surcharges for other violations and at-fault accidents and surcharges imposed by the Division of Motor Vehicles still apply.

"We are trying to help uninsured drivers do the right thing," said Commissioner Bakke. " ‘Last Chance’ offers those with the greatest impediments to becoming legal an opportunity to come back to the market at a lower cost."

Persons eligible for the program are those who must buy auto insurance through NJ-PAIP for one of two reasons: They have a conviction for driving uninsured, or they were canceled for not paying their premium and have been without coverage more than 30 days. Participants cannot cancel an existing policy to get into the program.

Those who have a conviction for driving uninsured must still pay court costs and complete any court-imposed suspension of their driver’s license. Also, those who take advantage of "Last Chance" must separately show DMV that they have obtained coverage to avoid cancellation of their vehicle registration.

Surcharges that will be waived under the program are outlined below:

Liability/PIP Collision Comprehensive

Conviction for driving

Uninsured $1,035 $234 $117

Non-pay cancellation $ 115 $ 26 $ 13

Motorists can buy either a Standard Policy or a Basic Policy through NJ-PAIP. Under the Basic Policy, drivers opting for "bare bones" liability coverage would save either $115, or $1,035 if they had received a conviction. (Collision and comprehensive coverage can be added to a Basic Policy at a higher cost, with additional surcharges waived.)

Commissioner Bakke noted that New Jersey’s Basic Policy could be an appropriate, low-cost option for drivers with few family obligations or assets to protect. The Basic Policy, created by the Legislature in 1998, offers minimal liability coverage and $15,000 in medical benefits at a cost hundreds of dollars below that of Standard Policy.

"The Basic Policy is not for everyone," she said. "But if your only other choice is driving without insurance, it’s better a better option than driving illegally."

Drivers who simply let their old policy run out are encouraged to first seek coverage in the voluntary market, where rates are lower. Both the Basic and Standard Policies are available in the voluntary market; any driver who is denied a Basic Policy should immediately report this to the Department through the toll-free hot line, 1-800-446-SHOP.

Commissioner Bakke noted that the penalties for driving without insurance are severe: Drivers can lose their license for a year with the first conviction and face jail time for additional offenses. "Governor McGreevey has vowed to crack down on uninsured motorists, and is supportive of legislation that would impound the cars of those caught driving uninsured," she said. "We estimate there are up to 600,000 drivers without insurance, and it makes sense for those drivers to look at getting legal before they risk even greater penalties."

A sheet outlining the differences between New Jersey’s Basic and Standard Policies is attached. Information is also available on the Department’s Web site, www.njdobi.org.

Bodily Injury Liability (Coverage for claims by people injured as a result of an accident you cause)

Basic Policy: Coverage is not included but $10,000 coverage for all persons, per accident, is available as an option.

Standard Policy: Coverage of $15,000 per person, per accident and $30,000 for all persons, per accident, is provided but higher limits are available.

Property Damage Liability (Coverage for claims by people whose property is damaged as a result of an accident you cause)

Basic Policy: Coverage of $5,000 per accident is provided.

Standard Policy: Coverage of $5,000 per accident is provided but higher limits are available.

Personal Injury Protection (Coverage for injuries sustained in an automobile accident by you or other persons covered under your policy)

Basic Policy: Coverage of $15,000 per person, per accident, and up to $250,000 for permanent or significant injury as defined in the policy.

Standard Policy: Coverage of $250,000 per person, per accident, unless a lower limit is selected. However, up to $250,000 for permanent or significant injury as defined in the policy regardless of selected limit.

Uninsured/Underinsured Motorist Coverage (Coverage protects you if you are in an accident with someone who does not have the minimum coverage required by law or is insured with limits less than your uninsured motorist limits)

Basic Policy: None

Standard Policy: Coverage is available in amounts similar to liability coverage.

Collision (Coverage for damage to your automobile from striking another vehicle or fixed object)

Basic Policy: Available as an option

Standard Policy: Available as an option

Comprehensive (Coverage for damage to your automobile caused by other than a collision)

Basic Policy: Available as an option

Standard Policy: Available as an option

www.njdobi.org • Phone: 1-800-446-SHOP (7467) • E-mail: commissioner@dobi.state.nj.us • Fax: (609)-292-2431