New Jersey car insurance requirements and laws

Minimum car insurance requirements

New Jersey raised its minimums in two steps under P.L. 2022, chapter 87. For standard policies issued or renewed on or after January 1, 2026, bodily injury liability must be at least $35,000 per person and $70,000 per accident, up from 25/50 in 2023–2025 and 15/30 before that. The property damage minimum rose to $25,000 in 2023, and uninsured/underinsured motorist coverage now carries the same 35/70 bodily injury minimum plus $25,000 for property damage. Compare states with the state car insurance requirements lookup.

New Jersey is unusual because drivers choose between two kinds of policy (Department of Banking and Insurance):

The "certain injuries" are permanent or significant brain injury, spinal cord injury or disfigurement, and trauma-center care for other permanent or significant injuries until the patient is stable.

Who the basic policy suits. The DOBI says the basic policy costs significantly less and meets the legal minimum, but it is meant for people with few family responsibilities and few assets, including income, to protect. With no required bodily injury coverage, a basic policyholder who seriously injures someone can be sued personally for the full amount.

What the minimums mean in practice. On a standard policy, if you cause a crash and the other driver has $50,000 in damages beyond what their PIP pays, your liability coverage pays $35,000 and you can be pursued for the other $15,000. On a basic policy without the $10,000 option, you would have no bodily injury coverage at all. state minimum vs full coverage: which do you need? and how much liability coverage do you need? can help.

Fault system and what it means after a crash

New Jersey is a choice no-fault state (Choice no-fault: New Jersey, Pennsylvania and Kentucky). Your own PIP pays medical bills and certain other economic losses after a crash, whoever caused it. On a standard policy you also choose your right to sue for pain and suffering:

• Limitation on Lawsuit (limited right to sue, a verbal threshold): you can sue for pain and suffering only for loss of a body part, significant disfigurement or scarring, a displaced fracture, loss of a fetus, a permanent injury or death. This option costs less, and the law applies it if no choice is made on the coverage selection form.
• No Limitation on Lawsuit (unlimited right to sue): you can sue for pain and suffering for any injury, at a higher premium.

Either way, you can still sue for economic losses beyond your PIP. The choice applies to you and relatives in your household who do not have their own auto policy. New Jersey uses modified comparative negligence with a 51% bar, and injury lawsuits generally must be filed within two years, while property damage claims have six years (statutes of limitations for car accident claims).

Optional coverage worth considering here

• Higher UM/UIM limits. The Insurance Research Council estimates 14.1% of New Jersey drivers were uninsured in 2023, and the state had one of the largest increases in the uninsured rate from 2017 to 2023. Basic policyholders and drivers with minimum limits make UIM especially useful (uninsured and underinsured motorist coverage explained).
• PIP options. Standard policies offer PIP limits from $15,000 to $250,000 or more, deductibles, a health-care-primary option (not available with Medicare or Medicaid) and extra PIP benefits such as income continuation, essential services, death and funeral benefits (Personal injury protection (PIP) explained).
• Collision and comprehensive for flooding, theft and dense-traffic fender benders.

What drives rates in New Jersey

The NAIC puts New Jersey's average annual expenditure at $1,573 in 2023, among the highest in the country and above the national $1,282 (What NAIC auto insurance data measures). New Jersey is the most densely populated state, with heavy commuter traffic around New York City and Philadelphia, high medical and repair costs, and PIP benefits that can reach $250,000 or more. The 2023 and 2026 minimum increases also raised the cost of the cheapest standard policies. Rates vary sharply between urban and suburban ZIP codes (Why your ZIP code changes your car insurance price).

Penalties for driving uninsured

A first offense for driving or allowing your car to be driven without the required insurance brings a fine of $300 to $1,000 and community service set by the court, and the court may suspend your license for up to one year, a suspension that can be reduced or eliminated if you show you now carry insurance (N.J.S.A. 39:6B-2). The DOBI notes that uninsured drivers also risk registration suspension and even jail time. New Jersey's no pay, no play rules also limit lawsuits by uninsured drivers. See penalties for driving without insurance.

SR-22 and high-risk drivers

New Jersey handles high-risk drivers through Motor Vehicle Commission surcharges and its assigned-risk market, the Personal Automobile Insurance Plan (PAIP), reachable at 800-652-2471. If another state ordered an SR-22 before you moved, keep it current (SR-22 insurance explained, assigned risk plans: insurance of last resort, high-risk car insurance: options when insurers say no).

Low-cost option for Medicaid recipients

The Special Automobile Insurance Policy (SAIP), often called "dollar-a-day" insurance, is available to drivers enrolled in federal Medicaid with hospitalization. It costs $365 a year ($360 if paid up front) and covers emergency treatment right after a crash and treatment of serious brain and spinal cord injuries up to $250,000, plus a $10,000 death benefit. It does not include liability, collision or comprehensive coverage. See state low-cost auto insurance programs.

Insurers with a strong presence in New Jersey

NJM Insurance, based in West Trenton, is one of the state's largest auto insurers. Other New Jersey-based or New Jersey-focused carriers include Plymouth Rock Assurance, Palisades, CURE Auto Insurance and Selective Insurance. National writers GEICO, Progressive and Allstate are also major players (regional car insurers: when smaller carriers can beat the giants).

Where to get help

The New Jersey Department of Banking and Insurance regulates insurers and runs the Office of the Insurance Ombudsman. Call the consumer hotline at 800-446-7467 (or 609-292-7272), visit nj.gov/dobi, or mail complaints to NJDOBI, P.O. Box 471, Trenton, NJ 08625-0471; the department is at 20 West State Street. The DOBI publishes an annual Auto Insurance Buyer's Guide and complaint ratios for insurers. For a question about the limited right to sue after an injury, consult a licensed New Jersey attorney.