The purpose of this blog is to inform my clients and other personal injury attorneys in the State of New Jersey about a phenomena that I have come across concerning the “bargain” automobile insurance companies that have been popping up and advertising not only in the State of New Jersey but nationally. In this regard, the problem I am about to describe has existed for several years in that I first noticed it when these insurance companies began doing business in the State of New Jersey. However, after letters from numerous attorneys and the threat of litigation, I was under the assumption that the practice had ended. That was until I met two new clients recently and realized that the practice is ongoing.
Did you ever wonder how these “bargain” insurance companies allow the general public to save 15% or more on car insurance? Well, is been my experience in a number of cases that the insurance they are providing to you for a lower premium is not the same insurance that you had with your prior insurance company. Specifically, what I have seen on numerous occasions is that these “bargain” automobile insurance companies reduce the medical expense benefits on newly opened policies from the “norm” in the State of New Jersey of $250,000.00 in medical expenses to only $15,000.00 in medical expenses without advising the insured individual or family.
What this means is that, in the event of a motor vehicle accident where you or a family member require medical attention, you will only have available to you or your family the amount of $15,000.00 in medical coverage as opposed to the “norm” of $250,000.00 in medical coverage. As you can imagine, given the high costs of medical treatment, the $15,000.00 in medical coverage it does not go along way and, as such, individuals injured in auto accidents who have this minimal $15,000.00 in medical coverage often have no means of obtaining medical treatment.
Obviously, unless you have a motor vehicle accident and require medical treatment, you will not even realize that your medical expense coverage has been reduced from your prior policy limits of $250,000.00 to the minimal medical expense coverage of $15,000.00. This scenario (the absence of a motor vehicle accident for which you need medical attention) is exactly what these bargain insurance companies are banking on so that you never find out that they have reduced your coverage without informing you of same.
As indicated above, it is unfortunate that many of my clients have had this happen to them. Several years ago, I was able to write threatening letters to these insurance companies demanding that the new “bargain” policy be reformed to include the higher medical expense limits of $250,000.00 or, in the alternative, I threatened to file lawsuits against them seeking the reformation of the automobile insurance policy and asserting a bad faith and punitive damage claim against them. Up until this time, I have not needed to file such a litigation in that the insurance companies have always reformed the policies at my request. I believe that, in the event such matters were ever litigated, the “bargain” insurance companies could be heavily fined for such practices within the State of New Jersey.
Accordingly, in light of all the above, it is important for you to insure that the policy limits in your new “bargain” insurance policy on the same policy limits that you had in your prior policy. Of course, it may be difficult for a layperson to decipher exactly what coverages are contained in their new or old policies of automobile insurance. I would invite anyone to submit their new and old declaration pages for my review so I may advise you accordingly. A quick review of your automobile insurance policy now could save a great deal of time later-especially if you require medical treatment the cost of which exceeds your policy limits.