EXAMPLE of UNDERINSURED MOTORIST COVERAGE
	Jane purchases $100,000 in liability coverage and $100,000 in underinsured motorist coverage. Sam purchases only $15,000 in liability coverage. Sam crashes his car into Jane's car, causing $25,000 in damages. Sam's insurance company pays $15,000 of the damages, while Jane's insurance company pays the remaining $10,000 from her underinsured motorist coverage.

Insurance policies use terms that may be unfamiliar to the average driver. It is useful to understand what these terms mean so you can make better, more informed decisions about your coverage.

COVERAGES — Your auto insurance policy is divided into different coverages based on the type of claim that will be paid to you or others.

These COVERAGES are:

PERSONAL INJURY PROTECTION — Otherwise known as "PIP," this is your medical coverage for injuries you (and others) suffer in an auto accident. PIP pays if you or other persons covered under your policy are injured in an auto accident. It is sometimes called "no-fault" coverage because it pays your own medical expenses no matter who caused the auto accident. PIP has two parts — (1) coverage for the cost of treatment you receive from hospitals, doctors and other medical providers and any medical equipment that may be needed to treat your injuries and (2) reimbursement for certain other expenses you may have because you are hurt, such as lost wages and the need to hire someone to take care of your home or family.

LIABILITY — This coverage pays others for damages from an auto accident that you cause. It also pays for a lawyer to defend you if you are sued for damages that you cause.

There are two kinds of liability coverage: BODILY INJURY and PROPERTY DAMAGE.

BODILY INJURY LIABILITY COVERAGE — Pays for claims and lawsuits by people who are injured or die as a result of an accident you cause. (See The Right to Sue section for lawsuit options). It compensates others for pain, suffering and economic damages, such as lost wages.

PROPERTY DAMAGE LIABILITY COVERAGE — Pays for claims and lawsuits by people whose property is damaged as a result of an auto accident you cause. (May also be purchased as a combined single limit with bodily injury liability coverage.)

COMBINED SINGLE-LIMIT LIABILITY COVERAGE — Under the Standard Policy, New Jersey Manufacturers Insurance Company and New Jersey Re-Insurance Company provide Liability Coverage for both Bodily Injury and Property Damage as a combined single limit.

UNINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by an uninsured motorist.

UNDERINSURED MOTORIST COVERAGE — Pays you for property damage or bodily injury if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage.

COLLISION COVERAGE — Pays for damage to your vehicle as the result of a collision with another car or other object.

COMPREHENSIVE COVERAGE — Pays for damage to your vehicle that is not a result of a collision, such as theft of your car, vandalism, flooding, fire or a broken windshield. However, it will pay if you collide with an animal.

EXTENDED MEDICAL EXPENSE COVERAGE LIMIT (NON-PIP) — Provides benefits if you are injured while riding in, or as a pedestrian when struck by, a motor vehicle that is not an "automobile" as defined by State law. Some of these vehicles are buses, motorcycles, taxicabs and commercial trucks. A limit of $10,000 is provided at an annual premium of $1 per car.