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Licensed auto and home insurance agent
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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
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Licensed property and casualty insurance agent
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NPN: 21630969
Updated
New Jersey drivers must carry minimum liability coverage of 35/70/25 and at least $15,000 in personal injury protection (PIP).[1] The Garden State follows a “choice no-fault” system, meaning drivers generally rely on their own PIP coverage for medical expenses after an accident, regardless of fault.
You can also choose an option that allows you to sue the at-fault driver for pain and suffering.
Here are more details about New Jersey car insurance laws.
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Drivers must meet the following minimum New Jersey car insurance requirements under a standard policy:
Bodily injury liability: $35,000 per person, $70,000 per accident
Property damage liability: $25,000 per accident
Personal injury protection: $15,000 per accident
New Jersey also allows drivers to choose a basic policy, which offers less coverage than the standard auto insurance policy. It provides $5,000 in property damage liability coverage and $15,000 in PIP per accident. Uninsured/underinsured motorist (UM/UIM) coverage is available under the standard policy but not the basic policy.
Federal Medicaid recipients are eligible for a Special Automobile Insurance Policy, which provides medical-only coverage for $365 per year.
New Jersey updated its liability requirements in 2023, with higher limits taking effect in 2026.[2]The Garden State now has some of the highest minimums in the country. Only Alaska, Maine, and Michigan have higher auto liability insurance requirements.
New Jersey courts and insurers use the state’s Comparative Negligence Act to determine fault and compensation after an accident. If you’re more than 50% at fault for a car accident, you can’t recover damages from the other party. If you’re 50% or less at fault, your compensation is reduced by the percentage you’re considered at fault.
No. State-minimum car insurance in New Jersey is almost never enough to fully protect you financially in an at-fault accident, especially in multi-vehicle crashes.
A minimum liability coverage policy may satisfy legal requirements. Still, it’s likely not enough to cover medical expenses, vehicle repairs, lost wages, and other claim costs after an at-fault accident. New Jersey drivers with savings, a home, or other assets should consider higher policy limits.
You should also consider the following optional coverages:
Comprehensive coverage: Comprehensive coverage pays for non-collision events, such as damage from hail, fire, wind, and vehicle theft, which are frequent occurrences in New Jersey.[3] [4]
Collision coverage: Collision insurance pays for damage to your vehicle after a crash, no matter who’s at fault.
Uninsured motorist coverage: Around 14% of people in New Jersey drive uninsured, according to the Insurance Information Institute. This coverage helps pay for damage caused by someone else who doesn’t have insurance.
Driving uninsured is illegal in New Jersey, and you must carry proof of insurance. Drivers who operate a vehicle without valid insurance can face fines, license suspension, community service requirements, and jail time.
Offense | Potential Penalties |
|---|---|
| First offense |
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| Second and subsequent offenses |
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The New Jersey Department of Banking and Insurance (NJDOBI) also warns drivers that they’re responsible for any damages or injuries they cause while driving, including when driving without insurance.
Even if you’re not in an accident, a lapse in coverage can mean higher car insurance rates. Insurance companies often consider insurance history when setting premiums in New Jersey.
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New Jersey refers to its limited tort system as the limited right to sue, or a verbal threshold. Choosing this option means you can’t sue the at-fault driver for non-economic damages like pain and suffering. New Jersey law provides exceptions for certain serious injuries, including permanent injuries.
Basic policies in New Jersey only include a limited right to sue. But you can still recover economic damages with a limited right to sue, including medical expenses, lost wages, and other measurable financial losses.
You can opt for the unlimited right to sue if you have a standard policy. It costs more, but it gives you the right to seek damages for pain and suffering for any injury caused by someone else.
Personal injury lawyers or a car accident attorney can help you navigate New Jersey’s limited tort laws if you’re injured in an accident.
Understanding New Jersey car insurance laws can help you make the right decisions and avoid costly mistakes. Below are answers to common questions about New Jersey insurance requirements.
Yes. New Jersey is a choice no-fault insurance state. Drivers in New Jersey use their own PIP coverage for auto injuries, regardless of fault. They also choose a limited or unlimited right to sue the at-fault party for pain and suffering.
The basic policy is best for drivers with few assets or family responsibilities, like young drivers. But it provides less protection than a standard policy and could leave you paying out of pocket if you cause an accident.
No. You don’t have the right to sue for pain and suffering if you have basic auto insurance in New Jersey. You’ll need a standard policy with the unlimited right-to-sue option.
The “Health Insurer for PIP” option in New Jersey allows eligible drivers to designate their health insurer as the primary payer for accident-related medical treatment, rather than using their PIP coverage under their auto policy. Before choosing this option, make sure your health insurance policy covers injuries from motor vehicle accidents.
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Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
Featured in
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 21630969
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