Imagine that your colleague Mary has not yet switched her insurance coverage to Plymouth Rock Assurance, and her carrier goes bankrupt tomorrow. Through no fault of her own, she is left without the coverage she purchased.
The New Jersey Property-Liability Insurance Guaranty Association (NJ PLIGA) is Mary’s safety net in this situation. All car insurance companies in New Jersey are required by the state to be members of NJ PLIGA and collect funds for its operations. The NJ PLIGA fee on your bill supplies a pool of money to pay claims in the event an insurance company becomes insolvent.