The states set up funds for that payment of damages as a result of automobile accidents. A resident of either of these states, upon fulfilling the prerequisites, may ask for order for that payment of the judgment from the state treasurer out. of the unsatisfied judgment fund.
In New Jersey the fund is created by various contributions such as: a tax on every uninsured automobile owner; a tax on every insured automobile owner; and a tax to be paid by each insurance provider of I % of its total premiums.
Liability car insurance protects against claims of others. The company agrees to fund all damages that you become legally obligated to cover as a result of the ownership, maintenance or usage of your automobile.
The company does not accept pay all claims, but only those for which you become legally obligated. Your organization (or the other fellow’s) doesn’t need to pay off since there was an accident.
The cars crashed with an intersection. There were no traffic lights or signs. Both were equally to blame and admitted it.
Neither First driver nor Second driver could collect. Neither was legally accountable for the other’s damage. Therefore, their insurance companies will not have to pay. Coverage and liability won’t be the same thing. Within the above example, First driver and secondly driver both had coverage. These folks were entitled to the entire benefits of their insurance. If either were sued, his company would defend him-he would be covered.
But don’t get the idea that because there is coverage, the organization must pay. There has to be legal liability. The following is another illustration of coverage.
Someone steals your vehicle and recklessly runs down a pedestrian. You’ll have coverage but you would not be liable. The thief would have no coverage, but would be liable.
Why do you find it important for you to have coverage if there was no liability? To begin with, you could be sued. Coverage would entitle you to investigation of the accident, defense of the lawsuit and other benefits.
Whom does the policy protect? It covers the one named because the insured, anyone using the automobile, and then any person or organization legally accountable for the use of the automobile. Use of the automobile must be with permission of the named insured.