Dollar A Day Insurance NJ: What Is It? – Mattiacci Law, LLC

At times, we have car accident clients that have NJ Dollar A Day insurance in New Jersey. This is a type of auto insurance coverage available to certain New Jersey residents. The actual name for this insurance program is the Special Automobile Insurance Policy (SAIP). Our clients often do not realize how limited this type of insurance is when it comes to protecting them.

People who own a vehicle in New Jersey are required to have car insurance. The SAIP is a type of policy offered to give an affordable insurance option for those who are already receiving Medicaid.

Anyone considering dollar a day insurance should be very cautious as to whether this insurance will adequately protect you and your family. It will not provide any money to defend you if you cause an accident and are sued by another person. It will not pay for any vehicle damage caused by you to another vehicle. It will not pay to fix damage to your own car. This simple policy will not pay money to defend you against another person’s lawsuit if you injure anyone else. Also, this policy will significantly limit your ability to sue someone else if you are injured in a car accident unless specific types of injuries are sustained.

How can I get Dollar A Day insurance?

If you are interested in getting this type of limited insurance, you will have to contact an insurance company, insurance agent, or insurance agencies. These are car policies issued through insurance companies. They just have more limited coverage.

This insurance program is available only to those New Jersey residents who are eligible for Federal Medicaid with hospitalization. The cost of this auto insurance is $365 for the year. This is why it is often referred to as Dollar A Day insurance.

If a person applies for the SAIP, that person must show they are enrolled in Medicaid when the policy is first written and each time the policy is renewed. If the insured is no longer enrolled in Medicaid during the policy term the policy will not cancel. However, the insured will receive only the limited benefits of the policy. This insurance is not available to those whose driver’s license is revoked or suspended.

Dollar A Day insurance provides limited medical coverage

While this coverage is more affordable than other options, it has some significant limitations. First, this policy provides limited medical coverage, including emergency medical treatment immediately following an accident. However, additional medical treatment is not covered unless the person has suffered serious brain and spinal cord injuries. If so, then there is medical coverage up to $250,000.

Dollar A Day insurance also provides a $10,000 death benefit.

If a person that has Dollar A Day insurance does not suffer a serious brain and spinal cord injury, then ongoing treatment, such as doctor visits or physical therapy, will likely not be covered by this type of auto insurance. In this situation, injured people with Dollar A Day insurance often try to get treatment paid through their Medicaid coverage.

Dollar A Day insurance does not provide liability coverage

Another significant issue with Dollar A Day insurance is that it does not provide liability coverage, making it a limited auto insurance coverage option. This means that this insurance does not pay money if the insured driver injures someone else. Typically, an insurance company will hire an attorney to defend its insured if its insured driver causes a car accident. The insurance company will also pay a certain amount of money under the policy for claims made by anyone injured in an accident.

Dollar A Day insurance policies do not do this. If a driver with Dollar A Day insurance causes an accident and injures another person, the insurance company will not hire a lawyer. The insurance company will not provide any money to settle any claims brought by the other injured person. The driver with Dollar A Day insurance would be personally responsible for any damages caused to the other person.

The economic reality is that many people who have Dollar A Day insurance simply do not have the money to pay a judgment themselves. As a result, many attorneys simply won’t bring a lawsuit for significant damages through the court system. Because there is no insurance available through the Dollar A Day policy, the insurance company won’t pay any judgement won at court. Also, even if an injured person brings a lawsuit and gets a judgment because it is unlikely they will ever be able to recover a judgment against a driver who is on Medicaid or who has limited finances.

Dollar A Day insurance does not cover property damage

Dollar A Day insurance policies do not provide collision coverage, making it a very limited car insurance coverage option. This means that this insurance does not provide any money to repair the driver’s car if it is damaged in a collision. This policy also will not pay for the damage caused by an insured driver to another vehicle. The driver would then be personally responsible for paying the property damage to any other vehicle that he or she hits and damages.

While this insurance coverage is more affordable than other coverage, it should be used only by those that have no other option. This insurance is so minimal that it should be used only by those with limited financial resources. Other policies can provide more coverage for medical treatment, liability coverage to protect a driver if that driver injures another person, and collision coverage to repair a driver’s car if it is damaged.

What Do Standard Car Insurance Policies Cover?

A standard car insurance policy provides coverage for the policyholder’s vehicle, medical payments for those riding in the insured’s vehicle, compensation for property damage caused by the insured’s car, and liability for injuries caused by someone operating the insured’s auto. They also compensate for auto thefts, burglaries, and vandalism while offering options like roadside assistance.

Standard auto insurance policies differ from minimum coverage. Dollar-a-day policies serve as an example of minimum coverage: enough to meet legal standards but woefully below the financial protection needed after a severe accident. You can opt for liability-only insurance if you own your vehicle outright, which satisfies the law but provides no protection for your vehicle and any medical bills.

The more protection you carry, the less risk you bear. But you want to avoid over-insuring. Insurance agents help clients select appropriate coverage levels based on their needs and financial situation. Below we have listed the key components of standard auto insurance policies.

Coverage Types

Vehicle owners who have a car loan must carry full coverage car insurance. Full coverage provides liability and property protection. Finance companies require it to protect their investment in the loan. Vehicle owners without a note have the option of dropping their property and protection.

Bodily Injury Liability

This policy feature pays the medical bills of anyone you have injured in an accident. This coverage becomes active when another party files a claim against your insurance policy. For example, if you rear ended a vehicle and the other driver went to the hospital with whiplash injuries, the opposing insurance company would demand reimbursement for the medical bills it paid on behalf of its client.

Property Damage Liability

Property damage liability fixes the other party’s vehicle if you are liable for a collision. As with bodily injury liability, a claim against your policy from the opposing insurance company activates it. For instance, if you side swiped another vehicle, damaging the door, the other insurance company will seek reimbursement for the cost of fixing the door.  

Personal Injury Protection  

This section of the policy covers medical expenses for the driver and passengers in your vehicle. It applies regardless of fault. Eligible medical expenses include surgeries, X-rays, doctor’s bills, dental expenses, nursing services, medications, and prosthetics. Any expenses that are medically necessary and related to the accident are covered.

This policy feature also compensates the insured for lost wages and even pays the estate funeral expenses.

Uninsured/Underinsured Motorist   

Collecting a judgment from uninsured or underinsured drivers often proves impossible. This type of coverage pays you if the uninsured/underinsured driver is at fault.

Comprehensive   

Comprehensive pays for damage to your vehicle unrelated to an accident, such as vandalism, theft, and falling tree limbs.

Collision   

Collision insurance covers the damage to your vehicle regardless of fault. It’s the reason your car gets fixed right away–before a judgment is arbitrated or litigated.

Other Policy Features

Insurance companies offer additional coverage options that provide both convenience and financial protection:

Gap Insurance

The “gap” in gap insurance refers to the difference between the value of your vehicle and what you owe. Because vehicles depreciate, many vehicle owners find that when their insurance reimbuses them for the value of a totaled vehicle, the check proves insufficient to pay off their loan. Imagine still owing thousands of dollars on a vehicle that sits in a junkyard!

Gap insurance pays this difference, so you can start over with a new vehicle cleanly. 

Roadside Assistance

No one relishes the idea of being stuck on the side of the road during a breakdown or finding their battery has died. Most vehicle insurance companies offer roadside assistance as an added benefit. For a few extra dollars per month, you are one phone call away from a tow, battery charge, or gas if you run out on the road. 

New Car Replacement Coverage 

Even if you owe no money on your vehicle, it’s usually worth more to you in continued use than its book value, and the cost of an equivalent vehicle is likely to be more than that. New car replacement coverage pays the cost of a new vehicle of similar make and model rather than the lower book value.

Rental Reimbursement Coverage 

After an accident, it usually takes the body shop days or weeks to complete repairs. This policy election pays for a rental car while yours is in the shop.

Rideshare Coverage

Many insurance companies exclude coverage when you are using your vehicle for Uber or Lyft. Some offer rideshare coverage as an extra feature, so check with your insurer if you plan to work as an Uber or Lyft driver.

Exclusions

Auto policies exclude repairs from regular wear and tear and maintenance, such as oil changes or brake jobs. Also, exotic or performance cars need special insurance policies. 

For more information on the SAIP or Dollar A Day insurance in New Jersey, see the website for the State of New Jersey Department of Banking & Insurance

The Legal and Financial Pitfalls of Dollar A Day Insurance

From a legal perspective, Dollar A Day insurance presents significant challenges for anyone involved in an accident, particularly when it comes to securing fair compensation. Clients with this type of coverage often face an uphill battle in personal injury cases due to the lack of liability protection and minimal medical coverage, including emergency treatment. This can complicate the process of recovering damages, both for the insured and any other parties involved in the accident.

In cases where a driver with Dollar A Day insurance is at fault, the absence of liability coverage means that there’s no insurance company to negotiate settlements or pay out claims. As a result, injured parties may find themselves pursuing compensation directly from the at-fault driver, who may lack the financial resources to pay for damages. This can severely limit the ability of injured individuals to obtain the financial recovery they need to cover medical expenses, lost wages, and other damages.

Overcoming the Challenges of Limited Insurance Coverage in Personal Injury Cases

For low income drivers insured under such a limited policy, the scope for pursuing legal action is also restricted. The inability to claim adequate compensation for injuries sustained in an accident can leave clients with significant out-of-pocket expenses, adding to the stress and financial burden of recovering from a car accident. As a personal injury lawyer, understanding the nuances of these cases is essential to advising clients on their legal rights and potential outcomes.

If you or a family member have been involved in a car accident in New Jersey, contact the New Jersey personal injury firm of Mattiacci Law, LLC. Attorney John Mattiacci has extensive experience handling car accident cases throughout New Jersey. Contact us today for a free consultation.