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News Release

New Jersey Department of
Banking and Insurance

Commissioner Ken Kobylowski

For Immediate Release:
July 25, 2013

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

Christie Administration Offers Tips to Assist Consumers
Who Purchase Auto Insurance Online 

New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski today offered tips to shoppers to help them make educated choices and avoid scams when purchasing auto insurance online.

“The Internet provides consumers easy and quick access to many websites that offer to save them money on auto insurance,” said Commissioner Kobylowski.  “Some of these are legitimate but others can be fake websites, scams or firms that are offering inadequate coverage or very limited benefits. Also, sometimes information on legitimate sites can be confusing or unclear. Consumers need to be careful and follow some common sense practices in order to be able to shop successfully and choose the policy that best fits their needs at the best price.”

Decide Which Coverages You Need and Compare Those Coverages Quote for Quote With Each Insurance Company

Before consumers begin on line comparison shopping, they should first review their coverage options, make sure they understand them and then compare those coverages for each insurance quote they receive. 

Below are a few coverage options that consumers should compare for each auto insurance policy.

  • Liability Limits – Liability limits cover the other driver in an auto accident. Consumers should base this coverage on the assets they have to protect. In New Jersey the minimum required liability coverage is $5,000 in property damage for a basic policy and a minimum of $15,000 for bodily injury per person, $30,000 total bodily injury per accident.
  • Personal Injury Protection (PIP) – PIP pays medical expenses for consumers and their families following an accident. PIP coverage is requiredin New Jersey. Insurers are required to offer $250,000 default coverage, but consumers can buy less. The minimum required coverage is $15,000.
  • Uninsured Motorist/Underinsured Motorist – This coverage pays up to the limit of your policy if you or your family members are injured or your car is damaged  and the person at fault has no insurance or insufficient coverage.
  • Deductibles – Comprehensive (other than collision) and Collision coverage pay for property damages caused in a covered accident. Both coverages may not be required but adding either requires the selection of a deductible.  This is the amount you have to pay before your policy coverage begins to pay your claims. Generally the higher the deductible chosen, the lower the premium will be.
  • Optional Coverages – These can be anything from rental car coverage to towing services. Check for any deductibles that may apply.

General Guidelines For Shopping Online

  • Some websites will ask for your information and send it to an agent in your community who will provide the quote and write the policy.
  • Not all websites provide immediate quotes. In some cases a company representative will call to confirm information before providing a quote. In this case, ask to have the information e-mailed for your records.
  • All of the quotes a consumer receives should have matching coverages and limits. If they do not, consumers should contact the companies and request a revised estimate.
  • Some websites are authorized to make coverage available immediately while others cannot even if the consumer has made a premium payment.
  • In most cases, once consumers have made a policy payment, they should obtain a temporary insurance card that should be kept in their automobile. Some insurers can issue the policy electronically.  

Cyber Fraud

Insurance fraud is nothing new, but the Internet sometimes provides bad actors with more opportunities to commit fraud. Here are some common cyber fraud schemes to look out for:

  • Copycat websites with company logos – Fake websites promise insurance coverage from what appears to be a reputable insurance company. The consumer later learns that the real company never received the application or the payment.
  • Agents stealing premiums – Premium theft happens when agents who advertise on the Internet provide a fake policy and keep the insurance payment for themselves.
  • Sale of fake insurance – This happens when a website offers insurance at a low rate but the consumer later finds  out the insurance company doesn’t exist and the policy is worthless.

Tips to Avoid Fraud and Other Scams

  • Buy only from licensed companies and agents. To check whether a company or agent is licensed to sell auto insurance in New Jersey, check the Department of Banking and Insurance website at or call 1-800-446-7467.
  • Be wary of insurance offers obtained by e-mail.
  • Be careful if someone asks to drop one type of policy or coverage and buy another type.
  • Get rate quotes and other vital information in writing and keep records.
  • Make sure you receive your policy, not a photocopy, within 30 days.

Privacy Concerns

Consumers should be extremely careful to protect their confidential information when shopping online.

  • Be careful in providing personal information over the Internet. Consumers should keep their address, phone number, social security number, credit card information and medical information private unless they are dealing with a reputable licensed company or agent that legitimately needs that information to write an insurance policy or take a payment.
  • Look for an online privacy policy – Many companies post privacy policies on their websites, including how information provided to them will be used and protected.  Consumers should ask for the company’s privacy policy either through e-mail or by contacting the website’s webmaster.
  • Don’t allow companies to share your personal information – Many companies ask consumers if they can share their information with other companies. Generally consumers should not allow this.

“Overall, the Internet can be extremely helpful and convenient for consumers looking to purchase auto insurance,” said Commissioner Kobylowski, “but buyers must take some simple precautions to make sure they are dealing with a legitimate insurance company, compare all coverages quote for quote, read all materials carefully and be extremely careful in providing personal information online. Consumers who take a few precautions and shop carefully will have a better experience and be more likely to get the right insurance policy at the best price.”

OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.
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