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What if you have seven or more insurance eligibility points?

In accordance with New Jersey regulations for Eligible Person Qualifications, any driver who has accumulated seven or more insurance eligibility points for the three-year period immediately preceding the application for insurance or the three-year period ending 90 days prior to renewal of a policy may not be considered eligible to purchase coverage in the voluntary market. As a result, some insurers will direct them to purchase insurance through the Personal Automobile Insurance Plan (PAIP). It is important to note, however, that not all insurers in the voluntary market refuse to cover drivers with seven or more insurance eligibility points. If you have seven or more insurance eligibility points it may be a good idea to shop around and compare your coverage and pricing options.

The PAIP is not an insurance company; instead, it acts as an administrative clearinghouse and assigns each driver to a company for coverage. Therefore, this type of coverage is referred to as “assigned risk.” The state has standardized the rates for this type of coverage and they do not vary from company to company. The rates may also be substantially higher than rates in the voluntary market. To find PAIP producers in your area, call 1-800-652-2471 or visit the Department’s web site, www.njdobi.org.

How do you get out of the assigned risk market?

Each year when a policy comes up for renewal or upon the purchase of a new policy, the insurer will review a driver’s record for the preceding three-year period. Insurance eligibility points for a violation or accident are dropped when the incident falls outside the three-year “look back” period. Once your point total falls below seven, you will again become eligible to purchase insurance in the voluntary market.

Insurers assign points for driver
inexperience, motor vehicle violations,
suspensions and at-fault accidents.

For example, if you are found equally or
more at fault than any other driver
involved in an accident and your insurance
company pays a claim of $1,000 or more
($500 or more for accidents occurring
before June 9, 2003), five insurance
eligibility points will be assigned to you.