In This Article
Mike’s Quick Answer
On a New Jersey auto policy, UM or UIM limits generally cannot be selected above the policy’s bodily-injury liability limits. UM means uninsured motorist coverage, which may apply when the responsible driver has no usable liability insurance. UIM means underinsured motorist coverage, which may apply when that driver’s limits are lower than the insured person’s applicable UIM limit. A policyholder can often choose UM/UIM limits below the liability limits, subject to statutory minimums, but that choice reduces protection for the policyholder and household if someone else causes a serious crash.
Liability Protects Others; UM and UIM Protect You
Bodily-injury liability coverage pays covered claims when an insured causes injury to someone else. UM/UIM coverage looks in the opposite direction. It protects insured people when the at-fault driver’s insurance is absent or insufficient.
That difference is easy to miss when buying a policy. A person may purchase high liability limits to protect assets but select lower UM/UIM limits, leaving less protection when the family is the one injured.
New Jersey Ties the Maximum Limits Together
New Jersey law generally permits UM/UIM limits up to, but not above, the bodily-injury liability limits selected on the same policy. The declarations should show both sets of numbers.
A rejection or selection of lower limits may be documented through coverage-selection forms. Whether the carrier obtained a legally effective selection can matter when the insured expected matching protection.
UIM Is a Comparison, Not Extra Liability Insurance
UIM does not simply add its stated limit to whatever the other driver pays. New Jersey compares applicable liability limits with the insured’s UIM limits and applies statutory and policy credits. If the responsible driver’s available limit is not lower, the vehicle may not be underinsured for that claim.
Multiple vehicles, household policies, exclusions, step-down provisions, and anti-stacking rules can complicate the comparison. The number on one insurance card is not always the final coverage picture.
Review Coverage Before and After a Crash
Before a crash, I generally want clients to understand that UM/UIM protects their own household. The premium difference for stronger limits may be modest compared with the loss caused by a seriously underinsured driver, although insurance purchasing is a personal financial decision.
After a crash, I obtain the policies and selection forms, identify every potentially insured household member, and protect notice and consent rights before resolving the liability claim.
Frequently Asked Questions
Can I buy $500,000 in UIM with only $100,000 in liability coverage?
Generally not on the same New Jersey policy. UM/UIM limits ordinarily cannot exceed the selected bodily-injury liability limits.
Does a $250,000 UIM limit mean I receive $250,000?
No. Coverage, damages, fault, the at-fault limits, credits, and policy terms determine what may be recoverable.
Can I combine UIM limits from several cars?
New Jersey policies often prohibit stacking. Other applicable policies should still be identified and read before reaching a conclusion.
Sources and Further Reading
About Michael B. Fusco
I am Michael B. Fusco, a New Jersey personal injury lawyer who is Certified by the Supreme Court of New Jersey as a Civil Trial Attorney. For more than 15 years, I have represented injured people throughout New Jersey and have recovered more than $75 million in gross settlements and verdicts. I started Fusco Law because clients deserve direct answers, careful preparation, and a lawyer who remains personally involved. I can help guide clients through the complexities of a New Jersey personal injury case from the first investigation through settlement or trial. Past results do not guarantee future outcomes.
The At-Fault Driver's Limit Is Too Low?
UIM analysis should happen before the liability release is signed. Call 732-INJURED or contact Fusco Law so I can compare the policies, limits, and required notice step by step.
Important Disclaimer
This article provides general information only. It is not legal advice, and it does not create an attorney-client relationship. Contacting Fusco Law does not create an attorney-client relationship or make a communication privileged unless and until the firm agrees in writing to represent you. I am a personal injury attorney, not a medical doctor, accountant, tax adviser, or financial adviser. Medical, tax, accounting, and financial questions should be directed to an appropriately licensed professional. Every matter depends on its own facts and the law that applies. If you have questions about a New Jersey personal injury claim, contact Fusco Law.