Even before the Devils win that fourth Stanley Cup, New Jerseyites can honestly say, “We’re number one.” Why? According to the Insurance Information Institute, the Garden State led the nation with the lowest number of uninsured drivers on the road, at just 3.1 percent in 2019.

So go ahead and pat yourself on the back for being among the most responsible drivers in the U.S. It’s like people in New Jersey instinctively recognize that car insurance helps you avoid tickets, hefty lawsuits, and even jail time. Or maybe it’s because the law has made it easy for everyone to meet the state minimum required coverage.

One more thing that sensible and savvy folks love to do is lower their car insurance rates. After analyzing over 30 million quotes, Insurify’s proprietary data reveals that the average cost of car insurance premiums in New Jersey in 2021 was $267 per month. But drivers can easily beat that number when they engage in comparison shopping at Insurify. You’ll receive insurance quotes from 10+ insurers, all customized for your location, vehicle, and driving record, so you can get the coverage you deserve at a price you can afford in just a few minutes.

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Minimum Car Insurance Requirements in New Jersey 

New Jersey law differs from other states’ regulations because consumers must choose between two types of car insurance policies: a Basic Policy or a Standard Policy. While the Basic Policy is cheaper, it offers sparse options and protection. On the other hand, the Standard Policy is costlier, but it’s the most common policy because it provides better coverage.

Also, instead of a single minimum, the minimum requirements change based on the type of policy you choose. Here’s a table that summarizes both:

New Jersey Requirements Basic Policy Minimum Coverage Limits Standard Policy Minimum Coverage Limits
Bodily injury liability Coverage is not included, but $10,000 per accident is available $15,000 per person and $30,000 per accident
Property damage liability $5,000 per accident $5,000 per accident
Personal injury protection (PIP) $15,000 per person, per accident $15,000 per person, per accident
Uninsured and underinsured motorist coverage Not available $15,000 per person, $30,000 per accident bodily injury coverage, and $5,000 property damage
Right to sue Limited tort only Limited tort or full tort

You’ll need proof of auto insurance coverage if you want to register your vehicle, if you’re in an accident, or if you’re stopped by a police officer. Your policy’s bodily injury liability coverage helps pay for another driver’s medical expenses if you injure them in a collision. Property damage liability coverage helps pay for repairs to the other driver’s vehicle or property. However, these coverages will not pay for your injuries or vehicle damage.

New Jersey has no-fault state insurance, so personal injury protection is required. PIP coverage pays for 80 percent of covered medical expenses after an auto accident, regardless of fault. For example, Emily’s wreck resulted in $10,000 of medical bills. After her $250 deductible, she must pay 20 percent of the remaining $9,750, or $1,950, meaning she pays a total of $2,200 out of pocket and the insurance company pays $7,800.

>>>MORE: How Much Car Insurance Do I Need?

Uninsured motorist coverage protects you and your passengers if someone hits you and has no insurance. Underinsured motorist coverage protects you and your passengers if someone hits you without enough insurance to pay for your injuries.

Besides coverage, you must also choose between full tort (also called unlimited right to sue) and limited tort (also called limited right to sue). Full tort allows for “pain and suffering” damages regardless of the accident’s severity. With limited tort, unless there’s a serious injury, you can only sue for economic damages, such as lost wages and medical expenses. According to New Jersey car insurance laws, the following injuries would allow you to sue for pain and suffering with limited tort:

  • Loss of body part
  • Significant disfigurement or significant scarring
  • A displaced fracture
  • Loss of a fetus
  • Permanent injury (Any injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment based on objective medical proof.)
  • Death

Is state minimum car insurance enough in New Jersey

If you can squeeze it into your budget, think about buying more than the bare minimum, and at least get a Standard Policy. If you cause an accident, the expenses of injuries and property damage may exceed your coverage limits. So you’d be on the hook to pay the difference out of pocket, which might quickly jump into six-figure territory. You safeguard your assets if a catastrophic accident happens by increasing the limits on your auto insurance policy.

You should consider collision and comprehensive coverage if your motor vehicle‘s value is high enough that you couldn’t easily replace it with savings. If you have a loan or lease on your car, your lender will require both coverages. It’s when you own your vehicle free and clear that these coverages become optional. 

Collision coverage pays to repair or replace your car after a car accident. Comprehensive coverage, sometimes called “other than collision,” pays if your vehicle is damaged in a way that is not caused by a car accident, such as vandalism, hail, or theft.

What is the penalty for driving without car insurance in New Jersey?

The state of New Jersey sees uninsured driving as a serious offense, so always keep your proof of insurance handy. Punishments involve hefty fines, driver’s license suspension, community service, and even jail time. First-time offenders can expect fines up to $1,000 (with surcharges for repeats within three years), a one-year driver’s license suspension, court-appointed community service, and vehicle impoundment until proof of insurance is provided.

Second and subsequent offenders can expect fines from $500 to $5,000 (with surcharges for repeats within three years), driver’s license suspension for two years, community service for up to 180 hours, vehicle impoundment until proof of insurance is provided, and jail time of up to 14 days.

>>>MORE: Car Insurance for High-Risk Drivers

The penalties for offenders don’t even account for a potential lawsuit if you’re involved in an at-fault accident. In addition, because you don’t have insurance, you may be found 100 percent liable for the other driver’s medical expenses and property damage. The consequences of paying these expenses out of pocket could spell bankruptcy or similar financial ruin.

Minimum Requirements in New Jersey for SR-22 and FR-44 Policies

The SR-22 and FR-44 are forms proving that you meet certain levels of coverage and are usually required after driving without insurance or after a DUI, respectively. Although New Jersey doesn’t have SR-22 or FR-44 policies, it does honor other states’ requirements. So, if you needed an SR-22 or FR-44 in your previous state, the New Jersey DMV will ensure you follow the equivalent standards.

>>>MORE: Car Insurance Estimator

If you’re concerned about meeting the state’s demands so you can get back on the road, just head over to Insurify. There, you’ll find plenty of car insurance coverage options, all customized to your specific driver profile, location, and price point.

Additional Coverage New Jersey Drivers Should Consider

New Jerseyites have several ways to protect themselves and their property. Here are some coverages to increase your peace of mind:

  • Loan/lease payoff: It’s sometimes called gap coverage because it covers the “gap” between what you owe on your loan and what your car’s worth if it’s totaled.
  • Rental reimbursement: If your vehicle is undrivable, this coverage will pay for a rental until yours is repaired or replaced.
  • Roadside assistance: This covers things like jump-starts, tire changes, towing, and other services.
  • Medical payments coverage: This pays for the 20 percent of medical costs that PIP does not cover.
  • Additional PIP: Choose this option to increase your no-fault insurance coverage.
  • Income continuation: If accident-related injuries cause you to miss work, this coverage pays your lost wages, less Temporary Disability.
  • Essential services: The coverage pays for necessary services you can no longer perform after an automobile accident, such as cleaning your house, doing laundry, mowing your lawn, or shoveling snow.
  • Death benefit: If an accident causes a death, this allows estates or family members to receive any benefits not already collected by the coverages for income continuation and essential services.
  • Funeral expense benefit: In the case of death after an accident, this pays funeral expenses up to the selected limits.

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Frequently Asked Questions: New Jersey Minimum Car Insurance

Is car insurance mandatory in New Jersey?

Yes. According to the state of New Jersey Department of Banking and Insurance, all drivers must buy auto insurance. New Jersey auto insurance laws let you choose between the Basic Policy and Standard Policy. The Basic Policy only requires property damage liability insurance and PIP coverage, and the far more common Standard Policy requires bodily injury, property damage, PIP, and uninsured and underinsured motorist coverage.

In what situations do drivers in New Jersey have the right to sue?

New Jersey law lets you pick between full tort and limited tort coverage. If you have a Standard Policy and full tort, you have an unlimited right to sue. However, if you pick a Basic Policy or limited tort, you can only sue for economic damages, such as lost wages or medical expenses, unless you have a serious injury. Serious injuries include loss of a body part, disfigurement, and other permanent injuries.

Are there alternative proofs of financial responsibility in New Jersey?

To self-insure, you must own 25 cars or more. Otherwise, you must buy auto insurance to prove your financial responsibility in New Jersey.

Updated September 9, 2021

Courtney Roy is a financial and technology copywriter. He creates content that makes an actionable difference in the life of his readers. In addition to years of experience across multiple industries, Courtney has insurance licenses, a real estate license, and a degree in electrical engineering. He and his wife chase their five kids in the Phoenix, Arizona sun. You can learn more at thecopyprophet.com.