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Updated
New Jersey is a no-fault state for auto insurance. The state’s no-fault laws require all drivers to carry personal injury protection (PIP) coverage, often called no-fault coverage.
If you’re injured in a car accident in New Jersey, your PIP coverage will pay your medical bills and some other costs, regardless of who’s at fault, up to your policy limits. Your liability insurance will pay for damages that you cause to another driver, but it won’t cover their medical expenses.[1]
New Jersey allows drivers to choose between two policy options: standard and basic. Available coverages differ based on the option you choose.[2]
Standard policies include:
Bodily injury liability coverage
Property damage liability coverage
PIP
The basic policy, which is generally cheaper, includes:
An option for a much lower bodily injury limit
Lower property damage limit
PIP at the same level as a standard policy
No UM/UIM coverage
You can add collision and comprehensive to either the basic or standard policy option. A standard policy is more expensive and provides a wider range of coverage options, including an “unlimited right to sue” option.
Comparing through Insurify could cut your bill up to 50%
The standard and basic policies also differ in how they treat your right to sue someone who injures you in an accident.
New Jersey drivers who buy a standard policy can decide between a limited or unlimited right to sue after a car accident. If you opt for a basic policy, your right to sue is limited.
Drivers who select the unlimited right to sue option can sue an at-fault driver for pain and suffering of any injury. If you opt for a limited right to sue, you agree to only pursue legal action if an accident causes significant disfigurement or scarring, you lose a body part or pregnancy, or if you suffer a displaced fracture or permanent injury. Your heirs can sue if you die.
In an at-fault state, the driver who causes the accident is responsible for the other driver's damages, including injuries and property damage.
In a no-fault car insurance state, you file an injury claim with your own insurance after a crash, no matter who’s at fault. Most at-fault states require PIP coverage.
Question | At-Fault State | New Jersey: No-Fault State |
|---|---|---|
| Who pays first for injuries? | The at-fault driver’s insurer | Your own insurer |
| Is PIP required? | Generally, no | Yes, required in New Jersey |
| Can you sue the other driver? | Yes | Yes. But your rights may be limited depending on your policy choices. |
Currently, 12 states have no-fault insurance systems: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Pennsylvania, New Jersey, New York, North Dakota, and Utah.
If you’re injured in a car accident in New Jersey, you’ll typically file for reimbursement of medical expenses with your insurance company under your PIP coverage. You can submit your covered medical bills for reimbursement, no matter who caused the accident.
Your PIP insurance doesn’t cover damage to your vehicle. You’ll typically need to have collision coverage to protect your car. If the other driver causes the accident, you might be able to make a claim against their liability coverage.
For example, say you’re stopped at a red light in Newark when another driver rear-ends you. Even though the other driver is at fault, you first file a claim with your insurance company to pay for your medical expenses or injuries. For damage to your vehicle, you can file a claim against the other driver’s liability insurance.
Which pays first, PIP or my health insurance?
“One question we hear a lot from drivers in no-fault states is “Does my health insurance or PIP pay first?” Your health insurance will usually pay first if you’re hurt in an accident. PIP can pick up things health insurance doesn’t cover, like lost wages if you can’t work due to injuries from an accident.”
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Even though New Jersey is a no-fault state, who causes an accident still matters. New Jersey follows shared-fault rules — officially called a modified comparative negligence rule — to determine how much fault falls on both drivers involved in a car accident.
If you’re in an accident, the insurance companies will investigate to determine how much each driver contributed to the crash.[3]
You can get compensation from the other driver’s insurance if you’re 50% or less at fault in a crash. Your percentage of fault correlates to how much you get. If you’re 51% or more at fault, you can’t get compensation from the other driver.
For example, say you’re driving 10 mph over the speed limit when another driver runs a stop sign and hits you. After the insurance companies investigate, they determine you’re 20% at fault for speeding, and the other driver is 80% at fault for failing to stop.
If your total damages are $50,000, the amount you get would be reduced by 20%, so you would receive $40,000 from the at-fault driver’s insurance.
If you’re filing a claim with your own insurance company for collision coverage, comparative negligence doesn’t apply.
To drive legally in New Jersey, you need to meet the state’s minimum car insurance requirements of 35/25/15. You can do this by carrying a basic or standard policy.[4]
The following table shows the minimum required car insurance in New Jersey for the basic and standard policies.
Coverage Type | New Jersey Basic Policy Minimum Requirements | New Jersey Standard Policy Minimum Requirement | What It Covers |
|---|---|---|---|
| Bodily injury liability per person | N/A | $35,000 | Helps pay for the other driver’s injuries if you cause an accident |
| Bodily injury liability per accident | Optional $10,000 | $70,000 | Helps pay for the other drivers and their passengers’ injuries if you cause an accident |
| Property damage liability | $5,000 per accident | $25,000 | Helps pay for property damage as a result of an accident you cause |
| PIP | $15,000 | $15,000 | Helps pay for injuries you sustain in an accident, regardless of who caused the crash |
| Uninsured motorist | None | Up to the amounts selected for liability coverage | Helps pay for property damage or bodily injury if you’re in an accident caused by someone who doesn’t have insurance |
| Underinsured motorist | None | Up to the amounts selected for liability coverage | Helps pay for property damage or bodily injury if you’re in an accident caused by someone who has insufficient coverage |
It’s illegal to drive without insurance in New Jersey. Without liability coverage, you’d be responsible for paying for the pain and suffering that you cause to others in a crash. You might have to pay for things like lost wages and other economic damages you cause.
If you don’t have liability coverage in New Jersey and someone hits you, you can’t sue them. And if you’re caught driving without insurance, you’ll face fines, community service, and possible license suspension.
Minimum-coverage quotes start as low as $125/mo.
If you’re in an accident in New Jersey, here are some important steps to take:
Check for injuries. New Jersey has busy highways, so it’s important to try to pull off the road to a safe location and see if anyone is hurt. Call 911 if anyone’s injured.
Report the accident to the police. New Jersey law requires drivers to report a car crash when an accident involves injury, death, or property damage above $500. Failing to report an accident can result in a minimum fine of $30–$100 or more. It’s also possible to have your vehicle registration or driver’s license suspended or revoked.
Exchange information. Get the other driver’s name, contact information, and a photo of their driver’s license. If police are there, get the contact information for the officer who’ll file a police report. You’ll need a copy of the report for your insurer later.
Document the accident. If you’re able, write down notes and diagrams or take photos or videos of the vehicles and the crash scene.
Call your insurer. Contact your insurance company to report the crash, even if it wasn’t your fault. If you sustain injuries, your PIP insurance will typically cover your medical treatment costs.
File a claim. If the other driver is at fault, you can file a car accident claim against their property damage liability insurance. If you have full coverage, including collision and comprehensive, you can file a claim with your own insurer for your vehicle damage.
For more information about New Jersey’s no-fault car insurance system, check out the following answers to some of our most frequently asked questions.
In New Jersey, drivers can choose between a basic and standard insurance policy. A basic policy provides the minimum coverage allowed by the law. It includes $15,000 in PIP coverage, $5,000 in property damage liability, and an optional $10,000 in bodily injury liability.
If you don’t have a lot of assets or financial obligations, a basic policy could save you money.
In New Jersey, whether you can sue after a car accident depends on if you purchase a basic or standard auto insurance policy. A basic policy comes with a limited right to sue. This means you can go outside of the no-fault system to make a legal claim against another driver only in certain very serious situations.
A standard policy is more expensive and provides a wider range of coverage options, including an unlimited right to sue option.
Since New Jersey is a no-fault state for auto insurance, all drivers must buy PIP coverage. If you’re injured in an accident, you’ll submit a personal injury claim to your insurer, and your PIP coverage will pay your medical bills, regardless of who caused the crash.
A benefit of New Jersey’s no-fault car insurance system is that you can use your PIP coverage to pay for medical expenses without waiting for the insurance companies to determine who was at fault.
On average, full-coverage car insurance in New Jersey costs $254 per month, while liability-only policies average $183 monthly, according to Insurify data.
Insurify data scientists analyzed more than 250 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 500+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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7+ years in personal finance writing
Certified Financial Education Instructor
Licensed auto and home insurance agent
4+ years experience in insurance and personal finance editing
NPN: 20564519
Featured in
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Featured in
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