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New Jersey Car Insurance Requirements

All drivers in New Jersey are required to maintain minimum insurance requirements. Unlike other states, New Jersey law provides the option for a very basic insurance coverage that will meet state requirements and also a standard policy that provides more protection and gives you additional legal rights.

Similar to Pennsylvania, insurance law in New Jersey is based upon a choice no-fault system. In a no fault states, regardless of who is found to be at fault in an accident, each driver's insurance company pays for their own respective expenses relating to the accident. Motorists usually lose some rights under a no tort system but it helps reduce small lawsuits and expedites the compensation process. The "choice" part means that drivers are able to select whether or not they'd like to give up these rights. Specific laws vary from state to state.

Required Coverage

All personal vehicles in New Jersey require the following liability coverage requirements:

  • Property Damage

Additionally, New Jersey requires the following coverage:

  • Personal Injury Protection

While the bare minimum requirements in the state are covered by a basic policy, it was created specifically with those that do not have many family responsibilities or many real assets. It's often noted as a good policy for younger drivers who are just getting started driving and need insurance coverage.

It should be noted that under the basic policy, you automatically only have a limited right to sue for additional pain and suffering damages, but if you select at least a standard policy, you will have the option to select either an unlimited right or limited right to sue. The limited right to sue lowers your insurance premiums but also limits you from suing the at fault party for pain and suffering except if you have had one of the below injuries.

  • 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
Minimum New Jersey Car Insurance Requirements
Basic Policy
Property Damage Liability $5,000 Limit
Personal Injury Protection $15,000 Limit
PIP for Permanent or Significant Injury $250,000 Limit
Standard Policy
Bodily Injury Liability $15,000 / $30,000 Limit
Property Damage Liability $5,000 Limit
Uninsured/Underinsured Bodily Injury $15,000 / $30,000 Limit
Uninsured Motorist Property Damage $5,000 Limit
Personal Injury Protection $15,000 Limit
PIP for Permanent or Significant Injury $250,000 Limit

Additional insurance coverage can include:

  • Comprehensive and Collision Coverage

Comprehensive and collision coverage is a good optional insurance coverage to add to your policy to help cover the costs of damages to or replacement of your vehicle if it's been involved in an accident. Comprehensive coverage is helpful in covering losses from such incidents as a fire or the theft of your vehicle. Check the list of most stolen vehicles in New Jersey. Having this coverage is even more important if your vehicle is listed.

Proof of Insurance and Financial Responsibility

Establishing proof of insurance and financial responsibility

  • Get a basic liability car insurance policy
  • Get a standard liability car insurance policy
  • Self insurance is an available option to those individuals or companies owning more that 25 vehicles

Required Documentation

In order to provide proof of insurance, you can provide one of the following:

  • Insurance ID card provided by your insurance company
  • Certificate of self insurance

You must maintain proof of insurance and financial responsibility and present it:

  • When asked by a police officer
  • Before a car inspection
  • When involved in an accident

Failure to Maintain Financial Responsibility Penalties

If you are unable to show proof of insurance when asked by a police officer, you can face one of the following penalties:

  • Fines of at least $300
  • Community service
  • Time in jail
  • License suspension
  • Insurance surcharge

New Jersey Insurance Agents

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