Consumer Assistance – Assigned Risk Plan
NJPAIP Consumer Help
Nj high risk auto insurance.
What is NJPAIP?
NJ PAIP Car Insurance or NJ state mandated assigned high risk auto insurance for qualified applicants. The plan offers NJ drivers another option when they cannot obtain coverage elsewhere in the state of New Jersey. Assigned Companies provide personal private passenger car insurance coverage. To see if you qualify in general you must have a quote from a NJPAIP Certified Producer, as they are the only ones that may offer this state coverage.
Example: You apply for a policy and are told by the insurer that they will not insure you nor your auto due to NJMVC points or NJ insurance points (accidents, A DUI, driving suspended or without insurance or other entries) of which an insurance company may refuse or deny anyone coverage. Prior law would require companies writing policies to take any person that applied for coverage unless they had too many points, or were cancelled MID-Term for non payment of premium. With the Take All Comers law expiring, you may be refused for many different reasons such as; credit score, education level, town of residence, zip code, buying auto policy only, total points and several other reasons.
What if I am considered a NJ High Risk Driver? Get a Free Consumer Quote (856) 352-2349.
After you enter the New Jersey assigned risk auto pool, the insurance company assigned to you must typically keep you for three years, or until you are no longer qualified. At the end of that period, your company has the choice of keeping you as a customer or not renewing your policy. Even if the insurance company cancels your policy after you have kept your driving record clean and sent in premium payments on time, you should be able to find a preferred car insurance company to issue a policy for you. During your time as a New Jersey assigned risk insurance class driver, it is in your own best interest to keep your car insurance policy in force. This will be important when you try to obtain a policy once your are no longer a high risk. As time goes by without any driving accidents or violations, your odds of getting insurance on the NJ voluntary market become greater. Our certified NJPAIP producers may be able to help you secure other coverage.
Buying your policy: Your NJ-PAIP Certified Insurance Producer will need copies of certain documents; NJ Drivers License, NJ Registration, Proof of NJDMV/NJMVC/Insurance Points, and names of any NJ Insurance companies that have declined you coverage. The NJPAIP Certified producer will have to prove that all drivers in your household are insured somewhere.
How much auto insurance coverage do I need?
How much auto insurance coverage you need depends on a variety of different factors. In order to make an informed decision, you need to consider the various risks that you, your passengers, and your auto are likely to face. You also need to consider the amount of assets you have to protect. Uninsured motorist bodily injury coverage pays for medical expenses, lost wages, and other general damages when auto insurance policyholders, authorized drivers, or passengers are injured in an accident caused by a driver who has no insurance in NJ.
What is Collision Coverage?
This coverage helps pay for auto repair or replacement costs if your car rolls over or if your car hits another vehicle or object. When you buy your auto insurance policy, you will be asked to set your deductible for collision coverage. For example, if you set your deductible at $1,000, this decreases your auto insurance premium payments, but you will be required to pay for any damages up to $1,000 should your car need to be repaired or replaced.
What is Comprehensive Coverage?
Comprehensive coverage is an important part of your auto insurance policy. Comprehensive coverage helps pay for damage resulting from falling objects, fire, certain natural disasters, and vandalism. Comprehensive coverage also generally covers theft.
NJPAIP.Org Directory of State Certified Producers Available for assigned high risk insurance consumer assistance. DEDICATED ONLINE RESOURCE FOR NJ CAR INSURANCE CONSUMERS THAT HAVE BEEN DECLINED OR UNABLE TO OBTAIN COVERAGE IN THE VOLUNTARY MARKETPLACE IN NEW JERSEY. THIS SITE IS NOT AUTHORIZED BY, AFFILIATED WITH, NOR IN ANY WAY RELATED T0 AIPSO ANY STATE INSURANCE AUTHORITY,NOR ANY STATE APPROVED ASSIGNED RISK AUTOMOBILE INSURANCE PLAN. BY DESIGN THE ACTUAL PLAN ITSELF DOES NOT BIND POLICIES, INSTEAD NJPAIP CERTIFIED PRODUCERS UNDERWRITE APPLICANTS FOR QUALIFICATION. POLICIES ARE USUALLY BOUND IMMEDIATELY AND PROCESSED SUBJECT TO NORMAL UNDERWRITING PROCEDURES AS SET FORTH BY THE NJPAIP PLAN MANUAL. PERSONAL NJ AUTOMOBILE AND NJ CAR INSURANCE-PAIP-CAIP-LIMITED ASSIGNMENT DISTRIBUTION INSURANCE COMPANIES IN NEW JERSEY (LADS) SERVICING ONLY NJ HIGH RISK DRIVERS. ONLY A NJ-PAIP OR NJ CAIP CERTIFIED PRODUCERS MAY BIND COVERAGE FOR YOU. ALL EFFORT MUST BE MADE TO KEEP YOU OUT OF THE NJ STATE AUTOMOBILE INSURANCE PLANS, INCLUDING, BUT NOT LIMITED TOO TRYING TO PLACE COVERAGE ELSEWHERE.
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Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.
UPDATED: Dec 11, 2023
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Understanding The New Jersey Assigned Risk Plan: A Comprehensive Guide For Consumers
The New Jersey Assigned Risk Plan (NJ ARP) is a state-sponsored program designed to ensure that every driver has access to auto insurance, regardless of their driving history or circumstances. This comprehensive guide aims to provide consumers with a clear understanding of the NJ ARP and its various aspects. Whether you are a new driver, have a poor driving record, or simply cannot find affordable coverage elsewhere, this guide will help you navigate the complexities of the NJ ARP and make informed decisions about your auto insurance needs.
Table of Contents
Our Commitment to You
At the forefront of our mission is a commitment to providing you with unbiased, accurate, and up-to-date information about the NJ ARP. We understand that navigating the world of auto insurance can be overwhelming, so we have condensed the essential information into easily digestible sections, ensuring that you have all the tools you need to make informed decisions. From understanding eligibility requirements to exploring coverage options and purchasing insurance , this comprehensive guide will empower you to make the best choices for your unique circumstances. Read More: How does homeowners insurance work?
Enter your zip code below to view companies that have cheap insurance rates.
Finding the Best Auto Insurance Rates
When it comes to auto insurance , finding the best rates can save you a significant amount of money. The NJ ARP is designed to provide coverage to drivers who are considered high-risk, which often translates to higher premiums. However, that doesn’t mean you should settle for the first quote you receive. By shopping around and comparing rates from different insurance providers , you can find the most affordable coverage that meets your needs.
Additionally, consider taking steps to improve your driving record, such as attending defensive driving courses or maintaining a clean record. Over time, these efforts can positively impact your insurance rates, making it easier to transition out of the NJ ARP and into traditional coverage.
Understanding the New Jersey Personal Automobile Insurance Plan (NJ PAIP)
The New Jersey Personal Automobile Insurance Plan, also known as the NJ PAIP, is the specific program within the NJ ARP that provides auto insurance coverage to high-risk drivers. If you are unable to obtain insurance from traditional providers due to a poor driving record or other factors, the NJ PAIP can be your lifeline.
Eligibility Requirements for the NJ PAIP
To be eligible for the NJ PAIP, you must meet certain criteria set by the state. These criteria ensure that the program is available to those who genuinely need it and prevent abuse of the system. The specific requirements can vary, but typically include:
- A valid New Jersey driver’s license or a driver’s license suspension release form
- A vehicle registered to you or being added to your policy
- A demonstrated need for coverage through proof of denial from at least two insurance companies
It is important to review the exact eligibility requirements with the NJ ARP to ensure that you meet the necessary criteria before proceeding with the NJ PAIP application.
Exploring Coverage Options in the NJ PAIP
While the NJ PAIP is designed to provide basic auto insurance coverage, it is essential to understand that the options available may be more limited compared to traditional insurance plans. The coverage typically includes bodily injury liability, property damage liability, medical expense benefits, and uninsured/underinsured motorist coverage. However, comprehensive and collision coverage may not be offered or may have additional restrictions.
It is crucial to familiarize yourself with the specific coverage options available under the NJ PAIP and compare them to your needs and budget. Evaluate the risks you face and whether additional coverage may be necessary to protect your assets.
The Cost of Car Insurance in the New Jersey Assigned Risk Plan
The cost of car insurance in the NJ ARP can be higher compared to traditional insurance plans due to the higher risk associated with the insured drivers. However, it is important to note that the premiums can vary based on several factors, including your driving record, age, and the type of vehicle you drive.
One way to potentially reduce your premium is by opting for a higher deductible. While this will increase your out-of-pocket expenses in the event of a claim, it may lower your overall premium. Additionally, maintaining a clean driving record, even while covered by the NJ ARP, can help improve your chances of securing more affordable coverage in the future.
A Step-by-Step Guide to Purchasing Insurance from the NJ PAIP
Purchasing insurance from the NJ PAIP involves several steps to ensure that you meet the program’s requirements and secure the necessary coverage. Here is a step-by-step guide to help you along the way:
- Gather the required documents: Before applying for coverage, make sure you have all the necessary documents, including your New Jersey driver’s license, vehicle registration, and proof of denial from at least two insurance companies.
- Research insurance providers: While the NJ PAIP is administered by authorized carriers, it is still worth researching different providers to find the one that offers the best rates and coverage.
- Complete the application: Fill out the NJ PAIP application accurately and thoroughly, ensuring there are no discrepancies or missing information.
- Submit the application: Submit your completed application to the NJ ARP for processing.
- Pay the premium: If your application is approved, you will need to pay the premium to activate your coverage. Ensure you understand the payment schedule and options available.
- Review your policy: Take the time to review your policy thoroughly, ensuring that it covers the necessary aspects and meets your needs.
By following these steps, you can navigate the process of purchasing insurance from the NJ PAIP with confidence and ease.
Exploring Alternatives to the NJ PAIP
While the NJ PAIP provides an invaluable solution for drivers who cannot obtain coverage elsewhere, it is not the only option available. Exploring alternative insurance options can help you find more affordable coverage or transition out of the NJ ARP.
Consider reaching out to independent insurance agents, as they can often connect you with a broader range of providers who may offer better rates for high-risk drivers. Additionally, focusing on improving your driving record and maintaining a clean record can open up opportunities for traditional insurance coverage in the future.
Answers to Common Questions
Throughout the process of understanding the NJ ARP and the NJ PAIP, you may have questions that need clarification. Here are answers to some of the most common questions:
- What happens if I have an accident while insured through the NJ PAIP?
- Can I switch insurance providers while enrolled in the NJ PAIP?
- How long do I need to be insured through the NJ PAIP before transitioning to traditional coverage?
These answers provide a starting point for understanding some of the common concerns and queries drivers have when considering or enrolled in the NJ PAIP.
Additional Resources for You
Here are additional resources that can further assist you in navigating the NJ ARP and the NJ PAIP:
- New Jersey Department of Banking and Insurance: The official department overseeing insurance regulation in New Jersey. Their website offers a wealth of information and resources for consumers.
- Consumer Assistance: If you have questions or need assistance related to the NJ ARP or the NJ PAIP, the NJ Department of Banking and Insurance provides a consumer assistance hotline and email service.
These resources provide support and guidance beyond the scope of this comprehensive guide, ensuring that you have access to all the information you need as a consumer.
By taking the time to understand the New Jersey Assigned Risk Plan, specifically the NJ PAIP, you can make informed decisions about your auto insurance coverage. Remember to research your options, compare rates, and consider improving your driving record for future opportunities. The NJ ARP is there to ensure that every driver has access to coverage, allowing you to drive with confidence and comply with New Jersey’s auto insurance requirements .
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Car insurance is mandatory in New Jersey, but each insurance company sets its own underwriting guidelines regarding eligibility. In other words, a car insurance company could refuse to offer a policy to those with less-than-stellar driving records or credit scores. So, what happens when a high-risk driver in New Jersey can’t find coverage? Bankrate explores the New Jersey Assigned Risk Plan, which is designed to help you obtain a policy if you’re having trouble doing so with traditional carriers.
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What is the New Jersey Personal Automobile Insurance Plan (NJ PAIP)
Finding cheap car insurance for high-risk drivers may be more nuanced in some states. And if your credit score is poor or if your driving history has a few negative marks, it is possible to be rejected by some insurance companies. This is why the New Jersey Assigned Risk Plan came into existence in 1992. Also known as the New Jersey Personal Automobile Insurance Plan (NJ PAIP), this government initiative is meant to provide motorists in the state with car insurance when they have been turned down by private insurers because of their credit score or driving history.
Bear in mind that the NJ PAIP is not an auto insurance agency. Rather, it is a program that matches drivers with insurance companies for adequate coverage, also called an “assigned risk plan.”
Who is eligible for the NJ PAIP?
As with most state-sponsored insurance programs, to qualify for the NJ Assigned Risk Plan, you first have to offer proof that you have failed to get regular insurance — at least twice in the span of 60 days. Only those who have been declined all other insurance options can apply for the NJ PAIP.
Other eligibility requirements include:
- New Jersey resident and licensed driver
- Vehicle registered in New Jersey
- Suspended license for being uninsured
- Necessity of insurance to have license reinstated
Your credit score does not have any significance in applying for PAIP (although it can be a contributing factor to your premiums in some cases), but certain factors can still make you ineligible, such as:
- Invalid driver’s license
- History of car insurance policy lapses or non-payment of premiums
- Withholding information in the application
If you are turned down once by the PAIP, you are free to apply again if the ineligibility factors no longer exist.
What kind of coverage is available with the NJ PAIP?
New Jersey car insurance law mandates that all drivers maintain a minimum limit of liability coverage. Under the New Jersey Assigned Risk Plan, drivers may choose between a basic and a standard policy, with the former offering fewer coverage options than the latter. The basic policy does not include bodily injury in the minimum coverage but offers it as an add-on, up to $10,000 per accident. Property damage coverage of $5,000 per accident and personal injury protection of $15,000 per person per accident are also included in the basic plan. The base features of the standard policy include bodily injury coverage, property damage, personal injury protection, uninsured motorist coverage and collision and comprehensive coverages.
High-risk auto insurers associated with the New Jersey Assigned Risk Plan are obligated to provide coverage to drivers who qualify for three years. After that duration, if you are still a high-risk driver and fail to get regular insurance, you will likely be able to apply for PAIP again. Coverage options may differ from one insurance provider to another, however, so comparing available options will give you the best idea of what will suit your needs and budget.
How much does car insurance cost with the New Jersey Assigned Risk Plan?
High-risk car insurance is typically more expensive than the options in the general market and the NJ Assigned Risk Plan may be consistent with that trend. Your premium will also depend on the factors that individual insurance providers evaluate to set a price for you, which can include your ZIP code, age, type of vehicle and marital status, among other variables.
The NJ PAIP has two payment options: you can either pay the total annual premium in full at the start of your policy, or you can choose to pay a 30 percent deposit initially and the rest in installments over the next few months. If you are insured through this program, you are not bound to stay with it if you are eligible for a cheaper policy elsewhere. You are free to cancel the policy and your remaining premiums will be refunded. However, be sure your replacement policy is in force before terminating your NJ PAIP plan to avoid any lapse in coverage.
How to buy insurance from the NJ PAIP
For the most accurate quote, you will first need to find a NJ PAIP insurance producer .. Then, you can select an agent and contact them for a quote. The information you provide will be used to determine the amount you can expect to pay for insurance and also be matched with a high-risk insurer, so it is important that you provide as many details as possible.
The company that the NJ PAIP assigns to you must commit to providing you with insurance for the next three years, regardless of your driving history. Unlike purchasing regular car insurance, your options are likely to be fairly limited when it comes to high-risk insurance providers, so the three year obligation can potentially be a huge benefit.
Alternatives to the NJ PAIP
New Jersey is a no-fault state and seeks to ensure low-cost insurance is available to help drivers from all walks of life remain insured. There are ways to get high-risk insurance without state-sponsored programs if you look in the right places. If you have an imperfect driving history or little to no credit, you have the following options in New Jersey besides the Assigned Risk Plan:
- Special Automobile Insurance Policy (NJ SAIP): Another government program but meant for only those who are on Medicaid with hospitalization. Also called New Jersey Dollar a Day car insurance, it provides only medical coverage for emergency treatment after an accident.
- High-risk insurance companies : It is possible to find insurers that accept high-risk drivers, although you may have to do your own research to find those with which you will be eligible for coverage, and the three year guaranteed coverage period would not necessarily apply. Most national insurers also have different coverage options for motorists with DUIs, accidents and other violations on their record.
The laws in New Jersey seek to give every motorist access to car insurance. By gradually improving your driving record, you may become eligible for various discounts offered by most insurers that can reduce annual premiums either up front or over time. Otherwise, you may be able to obtain insurance through state-supported initiatives like the NJ PAIP.
Frequently asked questions
What is the best auto insurance company, how much insurance do i need in new jersey.
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $25,000 property damage liability per accident
- $15,000 personal injury protection (PIP)
- $25,000 uninsured motorist bodily injury per person
- $50,000 uninsured motorist bodily injury per accident
- $25,000 underinsured motorist bodily injury per person
- $50,000 underinsured motorist bodily injury per accident
Additionally, the New Jersey state minimums are slated to increase once more in 2026; the minimum limits for bodily injury and uninsured motorist for policies renewed on or after January 1, 2026, will be:
- $35,000 bodily injury liability per person
- $70,000 bodily injury liability per accident
- $35,000 uninsured motorist bodily injury per person
- $70,000 uninsured motorist bodily injury per accident
- $35,000 underinsured motorist bodily injury per accident
- $70,000 underinsured bodily injury per accident
Please note that required coverage levels for PIP and property damage coverage are not affected by this second increase.
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This is not for claims, legal proceedings or questions from insurance agents. It is for helping residents of NJ find insurance for their business. Go to business owner quote request form.
NJCAIP NJ Commercial Auto Insurance. Getting New Jersey commercial auto insurance for contractors, public livery, medical transport operation or commercial trucking in New Jersey can sometimes be hard. Use NJCAIP Certified Producers when you have been declined or canceled elsewhere or have problems finding coverage.
These types of risks may be referred to as “High Risk Commercial Auto Insurance” or “Non Standard – Assigned Risk Commercial Vehicle Insurance Plan or New Jersey Assigned Risk”.
CAIP or state assigned risk plans are where you go to find coverage when you can’t get insured elsewhere.
NJCAIP Certified Producers insure Commercially Registered Vehicles, private passenger types, contractors vehicles, tractor trailer trucks, straight trucks, box trucks, buses, bus fleets, public livery, medical transport vans, ambulances and others that are not insurable immediately in the NJ Commercial Vehicle Insurance Voluntary or NJ Preferred Insurance Markets.
All commercial motor vehicles registered or principally garaged in New Jersey are mandated by law to maintain liability insurance, N.J.S.A. 39:6B et seq. Commercial auto-truck-van-bus-public livery insurance coverage may be obtained on a voluntary market basis or through a licensed producer certified by the New Jersey Commercial Auto Insurance Plan.
Only NJCAIP Certified Producer Agents may offer this Commercial Auto Insurance coverage and transact these types of policies. If you are a business owner that needs help you could call (856) 352-2454.
NJCAIP is the state of New Jersey mechanism for obtaining Commercial Auto Insurance for Commercially Registered Vehicles that are not insurable immediately in the NJ Voluntary or Preferred Insurance Markets. Established January 1, 1984 to provide coverage for a New Jersey commercial automobile risks unable to obtain coverage in the voluntary market.
What is Commercial Vehicle Insurance? Commercial Auto Insurance or Business Auto Insurance insurance policies (BAP’s) insures a businesses use of cars, trucks, vans, semis, buses and many other possible vehicles in the daily routine of business operations. Policy coverage usually include vehicles that may be owned or leased by the business, hired by the company, or possibly vehicles that may be owned by certain employees that are used for business purposes.
Licensed and State Certified NJCAIP Producers-Transportation Coverage Specialists will help you find the right commercial vehicle insurance at the best price that is available to you.
NJCAIP.ORG, NEW JERSEY COMMERCIAL AUTO INSURANCE ONLINE RESOURCE FOR NJ COMMERCIAL AUTO INSURANCE FOR THOSE THAT HAVE NOT BEEN ABLE TO SECURE COVERAGE IN THE PREFERRED MARKETS.
YOUR PRIVATE INFORMATION REMAINS BETWEEN YOU AND YOUR AGENT OR CERTIFIED PRODUCER. WE WILL NEVER SELL NOR RENT YOUR INFORMATION OR EMAIL ADDRESS. ACCEPTANCE OF THESE TERM S ARE IMPLIED BY USE OF THIS FREE INTERNET RESOURCE. WE DISCLAIM ANY INFERENCE THAT THIS INFORMATION PROVIDED HEREIN IS LEGAL ADVICE. THIS INFORMATION IS PROVIDED AS IS AND IS FOR GENERIC INFORMATIONAL PURPOSES ONLY. A NJAAIP INSURANCE PLAN CERTIFIED PRODUCER IS THE BEST SOURCE TO ASSES YOUR INDIVIDUAL NEEDS. THIS SITE MAY CONTAIN WEB LINKS TO OTHER VALUABLE CONSUMER INFORMATIONAL OR GOVERNMENT SITES. THIS SITE IS N0T AUTH0RIZED BY, AFFILIATED WITH, N0R IN ANY WAY RELATED TO AIPS0, ANY STATE INSURANCE AUTH0RITY,NOR ANY STATE APPR0VED ASSIGNED RISK AUT0MOBILE INSURANCE PLAN. WE ARE NOT ACTING AS AN INSURANCE CARRIER, AGENT NOR BROKER. WE OFFER FREE CONSUMER RESOURCES TO ASSIST IN THE PRICING, QUALIFICATIONS AND PURCHASE OF APPROPRIATE LOCAL NJ HIGH RISK COMMERCIAL AUTO INSURANCE COVERAGE FROM PROPERLY LICENSED NJCAIP INSURANCE PRODUCERS WHO MAY HAVE ACCESS TO ADDITIONAL RESOURCES TO ASSIST YOU WITH FINDING ADDITIONAL INSURANCE OPTIONS.
How to Navigate Out of New Jersey’s Assigned Risk Plan
What is assigned risk.
Most states require companies to effectuate a workers compensation policy in order to legally run their business. However, carriers can decide not to insure certain companies because of the risks associated with a company’s industry, poor claims history, and/or other workers compensation related factors. Every state offers some type of program that guarantees workers compensation coverage for all companies that cannot obtain coverage directly from the insurance carrier of their choosing. For New Jersey, the NJWCIP can assign certain insurance carriers to cover these undesirable companies through their “Assigned Risk Plan.” Every company in New Jersey that is eligible and applies to the Assigned Risk Plan is guaranteed a workers’ compensation policy. However, along with not having much control over the policy that is chosen for them, companies who are forced in to applying for Assigned Risk can be assessed an additional surcharge of anywhere from 15 to 35% of their premium. In other words, your company wants to avoid Assigned Risk!
WHY You Should GET OUT of the Assigned Risk Plan?
Companies that apply for the Assigned Risk Plan, or “Market of Last Resort,” typically have high risks and will therefore experience high insurance premiums. Assigned Risk’s additional surcharge is calculated as a percentage of your premium payment(after your mod surcharge). So with a high premium, and high mod, this surcharge will have an even higher impact on your costs. The following chart shows some rough examples of premiums with corresponding surcharges that an Assigned Risk carrier can charge your company. This surcharge should be recognized as a loss because it can simply be avoided with proper risk management.
*In this simplified example, consider annual premium as the final amount you would pay, including your experience modification surcharge. For a more detailed example, scroll down.
Think of Assigned Risk’s cost to your company in the long run. If you are paying an insurance premium of $250,000, you can lose $87,500 every year just from being classified under the Assigned Risk Plan. This cost can accumulate and in just 4 years you will have unnecessarily paid $350,000. Start the process of getting your company off of the Assigned Risk Plan and you will save hundreds of thousands of dollars.
Here is an example of someone who got a quote inside Assigned Risk & outside. You will notice a few things. One, in Assigned Risk they were assessed a 20% surcharge (PPAP Factor). In their quote outside of Assigned Risk not only do they avoid that $112,000+ surcharge but they get a $61,000 premium discount (companies in Assigned Risk are not eligible.) The final result? Roughly $160,000 per year savings! The other thing you will note however is that 1.5 experience mod adding a $200,000 surcharge. While focusing on getting out of assigned risk is important, lowering that mod is where the true long term savings will occur. The combination of a lower mod, and removal from Assigned Risk, could easily save this mid-size company $350,000-$400,000/year. But that is for another article. If you’d like more information on how to do so, contact us about our Comp Care program .
HOW To GET OUT of Assigned Risk?
You are in Assigned Risk because your business has issues in the eyes of the insurance carrier and therefore you are not attractive to them. The proper way to go about getting out is to know WHY you have these issues and taking a long term approach towards fixing them. Sit down with your insurance broker to come up with a solid strategy to make you more attractive to them. Once that approach is in place, it is your broker’s job to market you to the carrier. Just the fact that you are taking the APPROPRIATE action in engaging a risk management program can help, as opposed to shopping your policy to attempt to fix your issues. That is called treating the symptom, while you really want to cure the disease. For example going to a B rated carrier is not a long term solution and it also will not fix your experience mod problems.
The most prevalent reasons for being in Assigned Risk are:
- Poor Claims History
- Certain High Risk Industries
- Small or New Business
Some issues are easier than others to fix. But they are all curable. For your claims issue, you need to start by having an impact on safety & culture to prevent them from happening in the first place. Maybe you will want to invest in loss control. You should also have a trusted partner on the back end as well. Your insurance partner should be pressuring liability and workers comp adjusters to factually substantiate their reserving practices, and to close out files and claims fast as these claims have a a large impact on your renewal. This is a practice that is continuous 52 weeks a year and not simply done at “renewal time” as it’s too late by then.
If you’re a new business it helps to show the carrier a resume that proves you have experience in the industry or running a business in general. If you’re in a high risk industry, there are in fact carriers that will write your business, but it is no doubt harder. They do it on a case by case basis and it helps to have a broker who has a deep knowledge of workers compensation, your business, and a great relationship with workers comp carriers that write your class of business.
The Assigned Risk Plan provides a valuable product and fills a need in the world of workers comp insurance. But for most employers a trip into the pool is not a pleasant one. For a plan and/or guidance on how your specific company can get off of or avoid the Assigned Risk Plan and save capital in both the short and long run, please call a Risk Advisor at 914-357-8444. We will provide a free consultation and analysis.
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Disclaimer WE ARE NOT ACTING AS AN INSURANCE CARRIER, AGENT NOR BROKER. NJPAIP.COM OFFERS FREE CONSUMER RESOURCES TO ASSIST IN THE PRICING, QUALIFICATIONS AND PURCHASE OF APPROPRIATE LOCAL INSURANCE COVERAGE FROM PROPERLY LICENSED PRODUCERS . YOUR PRIVATE INFORMATION REMAINS BETWEEN YOU AND THAT AGENT OR PRODUCER. WE WILL NEVER SELL NOR RENT YOUR INFORMATION OR EMAIL ADDRESS. ACCEPTANCE OF THESE TERM S ARE IMPLICIT AND IMPLIED BY USE OF THIS FREE INTERNET RESOURCE. WE DISCLAIM ANY INFERENCE THAT THIS INFORMATION PROVIDED HEREIN IS LEGAL ADVICE. THIS INFORMATION IS PROVIDED AS IS AND IS FOR GENERIC INFORMATIONAL PURPOSES ONLY. A NJPAIP CERTIFIED PRODUCER IS THE BEST SOURCE TO ASSES YOUR INDIVIDUAL NEEDS. THIS SITE MAY CONTAIN WEB LINKS TO OTHER INFORMATIONAL SITES.
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Workers Compensation Assigned Risk Plans
Assigned Risk Plans Are the Market of Last Resort
What Is an Assigned Risk Plan?
- Why Workers Comp May Be Hard to Get
- Who Administers the Plan?
How Can You Get Coverage?
Pros and cons of assigned risk plans.
Suppose you try to purchase a workers compensation policy in the standard market but no insurer will sell you a policy. This will create a dilemma since most states require employers to purchase workers compensation insurance. Fortunately, you'll have an alternative: You can secure coverage from your state's assigned risk plan .
Assigned risk plans are established by the states as a safety net for employers that are unable to obtain workers compensation coverage from "regular" insurers. They are the market of last resort for employers that would otherwise have no source of coverage. All states except monopolistic states have established a plan. The law in each state determines how the plan is administered and financed. Assigned risk plans are also called the residual market.
The monopolistic states don't need assigned risk plans because all employers in those states are required to secure workers comp insurance from a government-operated fund.
States have created assigned risk plans so that all employers can obtain workers compensation insurance. The ultimate goal is to ensure that employees who are injured on the job will receive the benefits entitled to them by law.
Why Might Workers Comp Coverage be Hard to Obtain?
Here are some reasons why an employer may have difficulty obtaining workers compensation insurance from a standard insurer:
- Poor loss history : If a business has sustained many small losses or a few large ones, underwriters may assume its management doesn't care about safety.
- New business : A new company is difficult for an underwriter to assess because it has no track record.
- Very small business : A very small company may not generate enough premium to compensate for the risk of claims.
- Hazardous occupation : Many insurers are unwilling to provide workers compensation coverage to employers in risky occupations like logging, trucking, and roofing.
Who Administers the Assigned Risk Plan?
All states have designated an administrator that operates the plan and oversees the issuance of policies. In most states, the administrator is one of the following:
- The National Council on Compensation Insurance (NCCI)
- The state competitive insurance fund
- The state rating organization or another third party
The NCCI administers plans on behalf of 22 jurisdictions. Each of these states requires all workers compensation insurers that operate within its borders to participate in the assigned risk plan. Insurers may either join a multi-state reinsurance pool or serve as a "direct assignment" carrier. When an insurer participates in a pooling arrangement, it may act as a servicing carrier (issuing policies and paying claims) or provide reinsurance to servicing carriers. If an insurer chooses the direct assignment option, it must agree to accept and retain all risks assigned by the NCCI. The direct assignment insurer pays all losses incurred by the assigned employers and is not reimbursed by reinsurance.
In 14 states, the assigned risk plan is administered by the state competitive fund. Examples are California, New York, and Montana. Most of the remaining states have designated their rating organization or an insurer as their plan administrator.
If you or your insurance agent is unable to secure workers compensation coverage for your business in the standard market, you or your agent may submit an application to your state's assigned risk plan administrator. The application procedure varies by state. If the plan in your state is administered by the NCCI, you can apply online 24 hours a day or mail your application to the NCCI via the U.S. Postal Service.
If the plan in your state is administered by a state fund or rating organization, check the administrator's website for application instructions.
To obtain coverage in the residual market, you must have applied for coverage and been rejected by one or more insurers. The number of required rejections varies by state. For instance, employers in West Virginia can apply for coverage in the assigned risk plan only if they provide evidence of rejection by two insurers.
The primary advantage of an assigned risk plan is that it provides coverage to employers that can't obtain insurance in the standard market. One major disadvantage is cost. Employers insured in the residual market generally pay higher rates than those insured in the voluntary market. Those whose experience modifier is greater than 1.0 may also be subject to a surcharge. In addition, some states have eliminated the premium discount on assigned risk policies. An example is Massachusetts. A premium discount is a credit applied when the premium exceeds a certain threshold.
Another drawback of assigned risk plans is that employers can't choose their insurer. Their policy is issued and managed by the plan administrator or servicing carrier. A third disadvantage is limited coverage. Policies issued in the residual market may not be as broad as those purchased from standard insurers. For instance, many policies afford no coverage for operations the employer undertakes in states other than the one where the policy was issued.
- Assigned risk plans serve employers that can't find workers comp coverage in the standard market.
- Most plans are administered by the NCCI, a state insurance fund, or a state rating agency.
- Policies purchased from an assigned risk plan are generally more expensive and provide less coverage than policies obtained in the standard market.
IRMI. " Assigned Risk Plans ." Accessed July 30, 2020.
IRMI. " Workers Compensation Residual Market ." Accessed July 29, 2020.
NCCI. " Insuring the Uninsurable. Workers Compensation Residual Market ." Accessed July 29, 2020.
NCCI. " Options for Submitting Assigned Risk Applications Online ." Accessed July 29, 2020.
State of West Virginia, Offices of the Insurance Commissioner. " Workers’ Compensation Assigned Risk Plan ," Page 2. Accessed July 29, 2020.
NCCI. " Assigned Risk Adjustment Program ." Accessed July 30, 2020.
The Workers Compensation Rating and Inspection Bureau of Massachusetts. " Premium Discount ." Accessed July 31, 2020.
NCCI. " Producers' Guide to Understanding NCCI's Residual Market Limited Other States Insurance Endorsement ." Accessed July 30, 2020.
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The New Jersey Assigned Risk Plan
Over the years, the rate of traffic crashes in New Jersey has been increasing. New Jersey saw more than 6,000,000 drivers in 2019, so it’s not surprising that there were over 200 000 accidents in 2019. The New Jersey Assigned Risk Plan was created to address these concerns. This plan was created to ensure that high-risk drivers with poor credit are insured.
New Jersey Personal Automobile Insurance Plan. (NJ PAIP).
In some states, it may be harder to find affordable car coverage for high risk drivers. Some insurance companies may reject you if you have a poor credit history or if there are any negative marks on your driving record. In 1992, the New Jersey Assigned Risk Plan was created. This government initiative , also known as the New Jersey Personal Automobile Insurance Plan or NJ PAIP, is designed to offer motorists in the state car insurance when private insurers have turned them down due to their driving record or credit score.
The NJ PAIP is not an insurance agency. It is an insurance program that matches drivers to companies to provide adequate coverage. Also known as an “assigned risks plan”,
Who is eligible to receive the NJ PAIP
As with all state-sponsored insurance programs you will need to prove that you have not been able to obtain regular insurance. This is at least two times within the 60 day period. The NJ PAIP is only available to those who have had all other insurance options declined.
Additional requirements may include:
- New Jersey resident, licensed driver
- New Jersey Vehicle registration
- Suspended License for Uninsured
- License reinstatement requires insurance
While your credit score is not important when applying for PAIP, it can contribute to your premiums in certain cases. However, there are some factors that could still make you ineligible.
- Invalid driver’s licence
- History of car insurance policies that have lapsed or were not paid in full
- Refrain from disclosing information in your application
You can apply again even if you have been turned down by the PAIP if you no longer meet the eligibility criteria.
What coverage is offered by the NJ PAIP and what are its limitations?
Drivers have the option of choosing between a standard or basic policy under the New Jersey Assigned Risk Plan. The latter offers fewer coverage options. The basic policy doesn’t include bodily injury as part of the minimum coverage, but it does offer it as an optional add-on up to $10,000 per incident. Basic coverage includes property damage coverage up to $5,000 per accident, and personal injury protection up to $15,000 per person per incident. Standard coverage includes bodily injury coverage, property loss coverage, and collision and comprehensive coverages.
Drivers who are eligible for coverage by high-risk auto insurance companies that are part of the New Jersey Assigned Risk Plan must be covered for at least three years. If you’re a high-risk driver who fails to obtain regular insurance during that period, you may be eligible to apply again for PAIP. While coverage options can vary from one provider to the next, comparing all options will help you determine what is best for your budget and needs.
What is the cost of car insurance with the New Jersey Assigned Risk Plan
The cost of high-risk insurance for cars is usually higher than those available in the general market. The NJ Assigned Risk Plan follows that trend. You may have to raise your coverage limits depending on which plan you choose to meet the state’s minimum requirements. The factors individual insurance providers consider when setting a price for you will affect your premium. This could include your ZIP code and marital status.
You have two options for paying the NJ PAIP premium. Either you pay the entire annual premium upfront or you pay a 30% deposit and then the remainder in monthly installments. You are not required to remain with this program if you can get a lower policy elsewhere. Your remaining premiums can be cancelled at any time. To avoid any coverage lapses, make sure that your replacement policy is in effect before you cancel your NJ PAIP plan.
How to purchase insurance through the NJ PAIP
To get a precise quote, go to the official website of the NJ PAIP. Fill out the form. Your information will be used to calculate the cost of insurance, and matched you with high-risk insurers. It is therefore important to provide as much detail as you can.
You must agree to provide insurance for three years regardless of your driving record to the NJ PAIP company you are assigned. The three-year obligation is a significant benefit, as it will limit your options when it comes high-risk providers.
Alternatives to the NJ PAIP
New Jersey is a state that offers low-cost insurance to drivers of all income levels. If you are looking for ways to obtain high-risk insurance, there are many options. You have these options in New Jersey, in addition to the Assigned Risk plan, if you have poor driving records or have little credit.
- Special Automobile Insurance Policy : This is another government program, but it is only for those who have Medicaid with hospitalization. It is also known as New Jersey Dollar a Day Car Insurance. It provides medical coverage only for emergency treatment following an accident.
- Insurance companies that are open to high-risk drivers It is possible for insurers to accept high-risk drivers. However, you may need to do some research and not be guaranteed coverage for three years. In New Jersey, insurers cannot use credit scores to determine premiums. National insurers offer different coverage options for motorists who have been convicted of DUIs, other offenses, or are currently in jail.
New Jersey’s laws aim to provide car insurance to all motorists. You may be eligible for discounts from most insurance companies that will reduce your annual premiums. You may also be eligible for insurance through state-sponsored initiatives.
Questions frequently asked
Which is the best auto insurer.
Insurance is subjective and individual. No one company can be considered the best. The best-known insurance providers are those that offer the best combination of affordable prices and excellent customer service, as well as discounts and coverage options.
What amount of insurance do I need for New Jersey?
New Jersey minimum requirements for car insurance are bodily injury coverage at $15,000 per person, $30,000 per accident, and $5000 property damage coverage. Drivers also need to carry $15,000 in personal injury protection, $15,000 in uninsured/underinsured motorist coverage for bodily injury and $5,000 for property damage.
How can I save money on my car insurance?
Two of the best ways to reduce your insurance premiums are choosing an affordable provider that offers the coverage you require and taking advantage discount opportunities. Many insurers offer basic discounts for having good driving habits, owning a home, bundling insurance policies, having a safe car, and being loyal customers. High-risk drivers may be able to receive additional discounts by contacting the provider directly.
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Commercial Insurance Help For Business Owners
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Commercial High Risk Auto Insurance and Trucking For Hire
Commercial auto insurance quotes, insure big rig trucks, box trucks, vans, sedans and business fleets.
When a business has been classified high risk for one or more reason and has trouble finding commercial auto, commercial truck insurance, general liability or commercial property insurance from readily available companies, we may be able to obtain coverage to help stay insured.
Get quick help and coverage with High Risk Commercial Auto Insurance, business use vehicles, NEMT to Big Rig Commercial Trucks, Box trucks, Taxi, Black Car or Bus fleet coverage.
NJCAIP and alternative coverage business owners help request forms.
Click here if you have all of your information now , otherwise use the quick contact form below.
Business and commercial insurance available now.
We will compare quotes for your commercial insurance options and any available companies that may offer you quotes.
If your company is a new venture you do not necessarily need the high risk commercial auto insurance plan.
What is NJCAIP – NJ Commercial Auto Insurance Plan?
NJCAIP is the state of New Jersey mechanism for eligible Commercially Registered Vehicles in the state of New Jersey that are not insurable immediately in the NJ Voluntary or NJ Preferred Commercial Auto Insurance Markets. Established January 1, 1984 under N.J.S.A. 17:29D-1 and implemented by N.J.A.C. 11:3-1.2, to provide coverage for a commercial automobile risks that are unable to obtain coverage in the NJ business auto insurance voluntary market.
High Risk Commercial or business auto insurance covers a large variety of business types and vehicles from extra heavy tractor trailers to the single vehicle handyman. When getting quotes it will be easier if you have license numbers and vehicle registrations or VIN’S along with prior company loss history(not required for contact) to make quoting easier & accurate.
If you have been refused commercial auto insurance for your business compare rates from the NJ state assigned risk plan known as the New Jersey High Risk Commercial Auto Insurance Plan Quotes .
Many companies require that you have current dated drivers history reports that shows all moving violations and usually list accidents. The report does not usually show what party was at fault in any of the accidents, that is why it is important to have your loss runs or loss history reports for 3-5 years if possible.
Below is an example and annual cost of NJCAIP – NJ Truck Insurance for one semi truck with federal filings $14,132 for one truck.
Some quotes may be able to bind immediately, while some make take a couple of days. In the worst case scenario the high risk commercial auto policies may have a 17 day waiting period before coverage may become active (refers to state assigned risk plans).
Discuss this and any other questions with your NJCAIP Certified Producer, agent, broker or company to make sure that you do not have any problems.