Auto Insurance In New Jersey: What's The Law?

Auto insurance is required in New Jersey. All drivers must provide proof of insurance when operating any vehicle, and failure to do so can result in fines, license suspension, and even jail time. New Jersey has a mandatory no-fault insurance system, and drivers are required to carry personal injury protection (PIP) insurance to cover medical expenses in the event of an accident, regardless of who is at fault. The state also has minimum coverage requirements for bodily injury liability, property damage liability, and uninsured motorist bodily injury.

Minimum insurance requirements

Auto insurance is a legal requirement in New Jersey, and drivers must carry a minimum amount of auto insurance to legally get behind the wheel. The minimum amount of coverage may not offer adequate protection in the event of an accident.

• Liability Insurance: This is a mandatory requirement in New Jersey. It covers the cost of damages to others if you are responsible for an accident. The minimum coverage includes $25,000 in bodily injury liability per person and $50,000 per accident. For property damage liability coverage, the minimum policy limit is $25,000.
• Personal Injury Protection (PIP): PIP is also mandatory in New Jersey and is often called No-Fault coverage. It covers medical expenses for you and other persons covered under your policy in the event of an automobile accident, regardless of who is at fault. The minimum requirement is $15,000 per person or per accident, but you can opt for higher coverage of $250,000 or more.
• Uninsured/Underinsured Motorist Coverage: This is also mandatory in New Jersey and protects you if you are in an accident with a driver who does not have insurance or does not have sufficient coverage. While there are no mandatory coverage limits, you can select a coverage limit up to the policy limits you choose for liability insurance. The minimum requirements are $25,000 per person and $50,000 per accident.

It is important to note that these minimum requirements may change over time, and drivers should stay updated with the latest regulations. Additionally, while minimum coverage policies are cheaper, they may not provide sufficient protection in the event of a significant accident.

No-fault insurance

In the state of New Jersey, auto insurance is required by law. All drivers must provide proof of insurance when operating any vehicle. Failure to do so can result in fines, license suspension, and even jail time.

New Jersey is one of the few states with no-fault car insurance laws. This means that, after a car accident, both drivers (and all injured parties) file claims and seek compensation from their own insurance providers, regardless of who is at fault.

Personal Injury Protection (PIP)

Also known as no-fault coverage, PIP insurance covers the cost of medical treatment and any necessary medical equipment for the policyholder and their passengers after a car accident, regardless of who is at fault. PIP can also provide reimbursement for other expenses related to an injury, including lost wages and essential services. The minimum amount of required PIP insurance in New Jersey is $15,000 per person or per accident, but drivers can choose to increase their coverage to $250,000 or more for serious or catastrophic injuries.

Limited Right to Sue

With a Basic Policy, the policyholder has a limited right to sue. This means that they can only pursue legal action against the at-fault driver if the accident caused significant injuries, such as permanent disfigurement, scarring, or a displaced fracture.

Unlimited Right to Sue

With a Standard Policy, the policyholder has an unlimited right to sue. This means that, after an accident, they can file a claim against the at-fault party regardless of the severity of the injuries or damage. This option costs more but provides greater flexibility in seeking compensation.

Uninsured Motorist Coverage

This type of coverage protects drivers in the event that they are in an accident with someone who does not have insurance. This is mandatory in New Jersey.

Liability Insurance

Liability insurance covers damages to other people's property in an accident caused by the policyholder. It does not cover medical expenses. In New Jersey, the minimum requirement for property damage liability coverage is $5,000.

Proof of insurance

Auto insurance is mandatory in New Jersey, and drivers must provide proof of insurance when operating any vehicle. Failure to do so can result in fines, license suspension, and even jail time.

You must carry proof of insurance with you in your vehicle at all times. It is required during traffic stops, accidents, vehicle inspections, and when registering a new car or renewing your license plate.

Formats of Proof of Insurance

In New Jersey, you can provide proof of insurance in either paper or electronic format. The electronic format can be displayed on a cellular telephone, tablet, or computer. While not required, it is recommended to keep a physical copy in your vehicle and a digital copy on your phone as a backup.

Consequences of Not Having Proof of Insurance

Failing to present proof of insurance when requested by law enforcement can result in fines. Additionally, driving without insurance in New Jersey is illegal and carries more severe penalties, including fines, license suspension, and even jail time for repeat offenses.

Replacing a Lost Proof of Insurance

If you lose or damage your proof of insurance card, contact your insurance company to request a replacement as soon as possible. You can usually obtain a hard copy by mail or download an electronic copy from their website or mobile app.

Basic and Standard Policies

Auto insurance is mandatory in New Jersey, and all drivers must provide proof of insurance when operating any vehicle. The type and cost of coverage can vary, and consumers can opt for one of two types of policies: a Standard Policy or a Basic Policy.

Basic Policy

The Basic Policy offers minimum protection at a lower cost than the Standard Policy. It is intended for those with few family responsibilities and few real assets, such as younger drivers who are just starting work and may not be able to afford more comprehensive coverage.

The Basic Policy includes the following coverages:

• Property Damage Liability: $5,000 coverage limit per accident.
• Personal Injury Protection (PIP): $15,000 per person, per accident, with extra coverage of up to $250,000 for certain severe injuries, including permanent and significant brain injuries, spinal cord damage, and disfigurement.
• Bodily Injury Liability: This coverage is not included in the Basic Policy, but some companies may offer it as an option with a $10,000 coverage limit per accident.
• Uninsured/Underinsured Motorist Coverage: This coverage is not included in the Basic Policy.
• Collision Coverage: This coverage may be available as an option, but it is not included in the Basic Policy.
• Comprehensive Coverage: This coverage may be available as an option, but it is not included in the Basic Policy.

The Basic Policy also includes a Limited Right to Sue option, which means that your ability to sue the other party after an accident is restricted.

Standard Policy

The Standard Policy, also known as a minimum policy, is similar to the basic policies offered in most other states. It includes higher coverage limits and provides more comprehensive protection than the Basic Policy.

The Standard Policy includes the following coverages:

• Bodily Injury Liability: A minimum of $25,000 per person and $50,000 per accident, with maximum limits of $250,000 per person and $500,000 per accident.
• Property Damage Liability: A minimum of $5,000 per accident.
• Personal Injury Protection (PIP): A minimum of $15,000 per person or per accident, with a maximum limit of $250,000. Regardless of the selected limit, you also get up to $250,000 in coverage for certain severe injuries, including permanent and significant brain injuries, spinal cord damage, and disfigurement.
• Uninsured/Underinsured Motorist Coverage: Not automatically included but available as an extra option.
• Collision Coverage: Available as an extra option from all companies under a Standard Policy.
• Comprehensive Coverage: Available as an extra option from all companies under a Standard Policy.

The Standard Policy also allows you to choose between a limited right to sue and an unlimited right to sue. Selecting the unlimited right to sue will result in higher insurance premiums.

Penalties for driving without insurance

Driving without insurance in New Jersey is considered a serious offense, with penalties ranging from hefty fines to license suspension and even jail time. Here are the details of the penalties for driving without insurance in New Jersey:

First Offense

For a first-time violation of driving without insurance, individuals can expect to face fines ranging from a minimum of $300 to a maximum of $1,000. The court may also impose additional court charges and fees. Furthermore, individuals will have their driver's license suspended for a year and be required to perform community service. The length and type of community service will be determined by the court.

On top of these penalties, individuals will have to pay a surcharge of $250 per year for three years, amounting to a total surcharge of $750. Additionally, their vehicle may be impounded, and they will have to pay a $100 administrative fee along with towing and storage fees to retrieve their vehicle.

Second and Subsequent Offenses

The penalties for a second offense of driving without insurance in New Jersey are more severe. Individuals will face a mandatory jail term of 14 days and a fine of up to $5,000. The driver's license will be suspended for at least two years, and the reinstatement will be at the discretion of the DMV chief administrator. The court may also assign up to 30 days of community service.

For second and subsequent offenses, the surcharge remains the same at $250 per year for three years, totaling $750. Additionally, the possibility of vehicle impoundment remains, along with the associated fees for towing, storage, and administrative costs.

Impact on Insurance Rates

Being convicted of driving without insurance can also have long-term consequences on insurance rates. A second or subsequent offense will result in the addition of insurance eligibility points, making it challenging and expensive to obtain auto insurance in the future.

Legal Defense

Given the severe consequences of driving without insurance in New Jersey, it is advisable to consult with an attorney to explore possible legal defenses. Some potential defenses include proving continuous insurance coverage, using a borrowed vehicle, demonstrating that the vehicle was not being operated, or showing that the insurance company did not provide proper notice of cancellation.

In summary, driving without insurance in New Jersey is a serious offense that can result in significant financial penalties, license suspension, community service, and even jail time. The specific penalties vary depending on whether it is a first offense or a repeat violation.

Frequently asked questions