Which statement describes the penalties for non-compliance with compulsory insurance requirements?

• A. The owner is denied immunities and is personally liable for PIP benefits; license and registration may be suspended
• B. The owner receives immunity from liability
• C. Only a small fine is levied with no other penalties
• D. No action is taken if a policy lapses

Answer: (A)

Non-compliance with compulsory insurance carries penalties designed to enforce coverage and protect others. If an owner fails to maintain the required insurance, they lose certain protections and become personally responsible for PIP benefits that would have been covered, meaning they must pay those PIP costs themselves. At the same time, the state can suspend the owner’s driver’s license and vehicle registration to compel compliance. This combination—loss of immunities, personal liability for PIP benefits, and possible suspension of license and registration—best reflects the real penalties for not meeting compulsory insurance requirements.