State offers dollar-a-day car insurance

Policies available to uninsured drivers eligible for Medicaid

Tuesday, November 11, 2003

Star-Ledger Staff

Nearly half of the state's 600,000 uninsured drivers now have the option of buying an auto-insurance policy that covers emergency room treatment and other health-care costs for as little as a dollar a day.

The new initiative, outlined by state officials yesterday at the Molly Pitcher Rest Stop on the New Jersey Turnpike, is part of a broader effort to drive down insurance costs for everyone by making sure all drivers have insurance.

"If you're on the road in New Jersey without auto insurance, you're breaking the law," said Gov. James E. McGreevey. "We knew we had to do more to help those with limited means drive legally. The dollar-a-day policy does that."

The policy is available only to those drivers who are eligible for federal Medicaid -- a potential pool of 255,000 New Jersey drivers. The state Department of Banking and Insurance approved forms for the policy Oct. 1 and has been testing it on a trial basis for several weeks. To date, about a dozen policies have been sold.

Under the policy, drivers would be covered for $15,000 worth of emergency care and $250,000 for catastrophic injury. The driver's Medicaid benefits would cover any nonemergency medical care.

The goal is to ensure that trauma centers are sufficiently reimbursed for treating accident victims. That, in turn, would help reduce the cost of personal injury protection for other drivers who now subsidize treatment for uninsured motorists.

"We're tackling the problems of the uninsured drivers," the governor said. "All of this should create downward pressure on premiums."

What is the dollar-a-day policy?
It is a new initiative to help make auto insurance available to drivers who are likely to go uninsured because of limited financial resources.

Who is eligible?
People who are currently enrolled in the federal Medicaid program, which provides health coverage for the poor.

What does it cost?
The policy costs $360 if you pay up front, or $365 in two installments. The policy is not available to drivers whose licenses are revoked or suspended.

How does that compare with other policies?
The average auto insurance premium in New Jersey is $1,092, the highest level in the nation.

What other bare-bones insurance policies are available?
The Basic Policy is a limited-liability coverage plan that could run anywhere from $500 to $1,200, depending upon the driver's record.

What does the Dollar-a-Day policy cover?
Emergency treatment immediately following an accident and treatment of serious brain and spinal cord injuries up to $250,000. It also provides a $10,000 death benefit.

What does the dollar-a-day policy not cover?
Outpatient treatment such as doctors' visits covered by Medicaid; damage to your own car; damage you may cause to other people or property.

How do I get the policy?
The policy can be obtained through most insurance agencies. If you're not sure, you can call the Personal Automobile Insurance Plan customer service line at (800) 652-2471, or visit the Banking and Insurance Department's Web site at

"All you have to decide is what to do with the time that is given you."
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