Leslie Garcia was thrilled when it cost her only $1 a day to insure the 10-year-old Chevy Lumina she had bought in the spring.

But she learned a hard lesson one morning last summer when another car crashed into the Lumina as Garcia, a 28-year-old mother of two from Elizabeth, Union County, drove to work. Garcia sustained two broken ribs and a neck bone injury. She required physical therapy for back pain. Garcia said that a week after the accident, she suffered a miscarriage. Her car had been totaled, and tow-yard storage fees were adding up while she was out of work.

Garcia discovered the other driver did not have insurance, so she called her insurer. The agent said that her dollar-a-day policy would pay for her emergency room treatment - and nothing else. And under the dollar-a-day Special Automobile Insurance Policy allowed in New Jersey - which provides no liability or personal injury coverage - she could not collect from the state's uninsured motorist fund.

"It has basically ruined my life," Garcia said. "Dollar-a-day was like having no insurance. More than one attorney told me I would have been better off having no insurance at all."

Few motorists realize that thousands of people are driving legally in New Jersey without liability coverage until they are involved in an accident with one of those drivers. The Press of Atlantic City reported in an Aug. 16 watchdog story that accident victims struck by drivers with dollar-a-day policies end up footing the bill. Sometimes the victims' insurance even goes up.

The Press estimates that 22,000 New Jersey drivers with dollar-a-day policies are causing 1,100 accidents and $4.7 million in damage per year. While they're a small percentage of drivers, their numbers are growing. Industry statistics show that the 19,000 policies issued so far this year already exceeds last year's total by 500.

Garcia's experience illustrates another risk of dollar-a-day policies, one that attorneys and insurance agents warned about: Motorists who think they are "covered" because they have what the state considers car insurance learn they are exposed to potentially large losses and bills following an accident.

Keith Zaid, an Atlantic City personal injury attorney with 30 years of experience, said he sees clients who don't realize how little protection dollar-a-day policies provide. Not only do they lack liability and property damage coverage, but they are bound by verbal threshold provisions that severely limit their ability to sue for pain and suffering.

"They find out when something bad happens, but then it's too late," Zaid said.

Some agents said they warn customers away from dollar-a-day policies. But lawyers said the number of dollar-a-day clients who call them for help suggests that many don't understand the policies.

"There's no way these companies are explaining to people what it means," said attorney Scott Grossman of Freehold. "What they say is, 'I can beat the other guy's price.'"

Illiana Melendez of Camden said that's exactly what happened to her. She said a Camden insurance agent told her the dollar-a-day program was designed to insure poor people, so she signed up. She said that one morning in August 2007, she couldn't stop her car on a rain-slicked Route 70 and was involved in an accident.

Melendez, 29, said she was shocked to learn her policy did not have liability coverage. A lawsuit against her resulted in a $6,500 judgment for damages. Melendez said her license was suspended because she wasn't aware of the judgment and is fighting to get it restored.

"It's a scam," she said. "It was never explained to me that there was no liability. All I was told was it was $365 and to just sign here. I would have never purchased this type of insurance if I had known."

To qualify for a dollar-a-day policy, a driver must be receiving Medicaid benefits. Garcia said her Medicaid ran out July 31, the day after her accident; she lost Medicaid after getting a job procuring computer equipment for an engineering firm. She said she didn't realize her car insurance wouldn't pay for medical treatments beyond the emergency room.

"I was looking for the cheapest insurance because I had an old car," Garcia said. "I didn't expect that any insurance policy would exist that didn't provide coverage."

She said that now she has no car and is facing thousands of dollars in bills. She said the tow yard reported her totaled car as abandoned to the State Police because she cannot afford its $2,600 storage fee. Garcia said she fears her license could be suspended for failure to pay the bill.

Garcia said she wrote to Gov. Jon S. Corzine asking why dollar-a-day policies are allowed, but got no reply. In response to a Press inquiry, the Governor's Office defended the program.

"Insurance plans and programs in New Jersey have dramatically improved during the last few years. This program is an important tool to enable eligible individuals the opportunity to legally drive to work, thus becoming productive citizens better able to care for their families," spokesman Robert Corrales said in an e-mailed statement.

Corzine's Republican opponent, Chris Christie, did not respond to requests for comment.

However, independent candidate Chris Daggett said The Press's findings revealed a fairness issue that should be addressed. He questioned why a small part of policy premiums couldn't be used to extend uninsured motorists coverage to accidents involving dollar-a-day motorists.

Stephen Carrellas, head of the state's National Motorists Association chapter, said his advocacy group opposes mandatory insurance laws. But he also said that given the effect of the state's laws, New Jersey could extend uninsured and under-insured protection to the relatively small number of policies that don't provide such coverage.

Daggett said finding a way to allow the poor to drive to work "is not a bad social policy." And even if all drivers had at least a basic policy - which costs only marginally more than dollar-a-day and provides some liability and personal injury coverage - accident victims and drivers still might not be made whole, he said.

But he said further analysis would yield a solution, and he understood why accident victims are angry. Readers contacted The Press after its initial report was published to express outrage that certain people are exempted from New Jersey's requirement to carry liability insurance.

Sandy Gibson, 51, of Winslow Township, Camden County, was driving through Camden in April 2008 when a car slammed the vehicle behind her into her Lexus. Gibson's rear bumper was destroyed, and she found her spare tire in the street. Repairs cost $3,000.

But Gibson's lawyer told her the other driver had a dollar-a-day policy that didn't include liability coverage.

"Her insurance company said, 'Basically, you're on your own,'" Gibson said.

"I was livid. There's such an emphasis on working people having to get coverage," said Gibson, a juvenile corrections officer. "But there are different rules based on your income."

Gibson said she still experiences back and neck pain from the accident. She said she wonders why the state allows drivers like the one who hit her to be on the road.

Anthony Natale, 42, of Marlborough, Monmouth County, said his wife and daughter had to receive physical therapy after another car hit theirs on Dec. 30.

"My wife said the strange thing was that the other guy just stood there laughing," he said.

Natale said he couldn't believe a policy existed that provides no liability coverage. He resented having to pay his family's medical bills and a deductible to repair the car.

"I realized why this fellow had such a cavalier attitude," Natale said. "He had nothing to lose."

Garcia is pressing criminal charges in local court against the uninsured driver who hit her car. Garcia said the prosecutor and public defender have urged her to drop the case, saying the other person could lose her license and be unable to drive to work. She said they also told her she won't get any money from the case.

"I lost a car. I lost my baby. I broke some ribs. I reversed a bone in my neck. I lost two months worth of wages. They blamed me for getting that insurance, like it was my fault," Garcia said. "I think at the least, this person should get her license suspended.

"I hope someone does something about this dollar-a-day insurance law," she added. "It has caused me nothing but grief."

Contact John Froonjian:

609-272-7273

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Findings

New Jersey's "dollar-a-day" car insurance program has created a growing class of motorists who can drive legally without complying with the state requirement to carry liability coverage. More dollar-a-day policies have already been issued this year than in all of 2008.

Accidents caused by dollar-a-day drivers are costing accident victims and their insurers an estimated $4.7 million per year.

Motorists who must foot the bills when they are hit by dollar-a-day drivers are not the only victims. People who sign up for dollar-a-day policies often do not understand how little coverage is provided until after they have an accident.

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Basic facts about New Jersey's dollar-a-day car insurance policies

http://pressofatlanticcity.com/web_specials/article_582dd140-8a17-11de-8ee7-001cc4c03286.html"> Read The Press of Atlantic City's original watchdog report.

Under the so-called "dollar-a-day" insurance program, about 22,000 low-income motorists are legally allowed to drive in this state without carrying property-damage liability insurance.

Only certain Medicaid recipients are eligible for dollar-a-day insurance, which costs $365.

The policy pays as much as $250,000 to treat only the policy holder's serious accident injuries, and includes a $10,000 death benefit.

Because the policies provide no liability coverage, motorists who are hit by dollar-a-day drivers foot the repair bills. Since dollar-a-day drivers are poor and have few assets, accident victims have little to gain by suing.

Basic car insurance policies that provide some liability and personal injury coverage can be obtained for as little as $50 to $100 more.

Applying standard accident rates and average costs, The Press estimates that dollar-a-day drivers cause 1,100 accidents a year in New Jersey and $4.7 million in damages.

Last year, more than 18,500 dollar-a-day policies were issued. As of Oct. 9, more than 19,000 policies have already been issued this year.