Best Auto Insurance Coverage Recommendations For New Jersey

If you're a resident of New Jersey, you're required to carry car insurance and purchase coverage before registering your vehicle. The state has its own minimum coverage requirements, and insurance coverage and costs may vary depending on where you live. New Jersey is a no-fault state, meaning your insurance will reimburse you for hospital expenses, wage losses, and funeral costs in the event of an accident, regardless of who is responsible. The minimum insurance requirements in New Jersey are $15,000 per person and $30,000 per incident for bodily injury liability, and $5,000 for property damage liability. Personal injury protection (PIP) is also mandatory and is set at a minimum of $15,000 per person.

No-fault insurance

In New Jersey, every vehicle owner must purchase and maintain the minimum required amounts of automobile insurance before registering their vehicle and driving on public roads. The state requires three different types of no-fault car insurance: personal injury protection (PIP) insurance, liability insurance, and uninsured motorist insurance.

Personal Injury Protection (PIP) Insurance

PIP insurance covers the medical expenses of the policyholder, as well as medical care for their passengers and members of their household after a car accident, regardless of who is at fault. The minimum amount of PIP coverage is $15,000 on a standard plan, but most drivers in New Jersey opt for $250,000 in coverage to prepare for serious or catastrophic injuries.

Liability Insurance

Liability insurance pays for the damages suffered by others in an accident that the policyholder causes. The only liability insurance that is required in New Jersey is property damage liability coverage with a minimum coverage of $5,000. However, bodily injury liability insurance is also available for an additional cost.

Uninsured Motorist Insurance

Uninsured motorist insurance protects the policyholder in the event of an accident with a driver who does not have insurance.

Basic and Standard Policies

New Jersey offers two types of policies: Basic and Standard. A Basic Policy includes the required types of car insurance listed above, while a Standard Policy includes additional coverage options, such as bodily injury liability insurance. With a Standard Policy, drivers can choose between "limited" and "unlimited" right to sue coverage. Limited right to sue is cheaper but restricts the policyholder's ability to sue an at-fault driver for non-economic damages like pain and suffering unless the injury is permanent or involves disfigurement. Unlimited right to sue places no restrictions on the policyholder's ability to sue.

Property damage liability

The minimum amount of property damage liability coverage required in New Jersey is $5,000 per accident. This means that if you are found at fault for an accident, your insurance will cover the cost of repairing or replacing the other party's property or vehicle, up to a maximum of $5,000.

However, it is important to note that property damage liability insurance does not cover damage to your own vehicle. If you want to be covered for damage to your own vehicle, you would need to add collision coverage to your policy. Collision coverage is not required by New Jersey law, but it is highly recommended to provide comprehensive protection in the event of an accident.

Additionally, the recommended amount of property damage liability coverage may vary depending on the value of the vehicle you are driving and the potential costs of repairs or replacement. If you are concerned that the minimum coverage may not be sufficient, you can increase your property damage liability limits. Most carriers recommend that full coverage includes $100,000 in property liability to ensure that you are adequately protected.

Bodily injury liability

In New Jersey, bodily injury liability coverage is a mandatory part of your auto insurance policy. It safeguards your assets in the event that you are found legally responsible for a covered accident, including certain expenses associated with bodily harm sustained by the other parties.

The minimum amount of bodily injury liability coverage in New Jersey is $15,000 per person, with a total maximum of $30,000 per incident. This means that if you are found at fault for an accident, your insurance will cover the medical expenses of the other driver and their passengers, up to $15,000 per person, and a total of $30,000 for all injured parties. This coverage typically includes prescription medications, rehabilitation costs such as physical or occupational therapy, lost wages due to an inability to work, and funeral costs in the unfortunate event of a fatality.

It is important to note that bodily injury liability coverage does not extend to you, your passengers, or your vehicle. It only covers the expenses of the other parties involved in the accident. To protect yourself and your passengers, you may want to consider adding personal injury protection (PIP) to your policy, which is not included in the basic package. PIP provides reimbursement for a portion of wage loss, medical expenses, and essential services incurred as a result of an accident for eligible injured parties, including your passengers.

While the minimum coverage may be sufficient for some, it is generally recommended to purchase higher liability limits if you can afford to do so. This will provide you with additional financial protection in the event of a costly accident. The higher your liability limits, the more you will pay for your insurance coverage. However, it is worth considering the potential costs of an accident and the peace of mind that comes with having sufficient coverage.

In summary, bodily injury liability coverage is an essential component of your auto insurance policy in New Jersey. It protects you from financial liability if you are found at fault for an accident, covering the medical expenses of the other parties involved. By understanding the specifics of this coverage and considering your own financial situation, you can make informed decisions about the level of protection that is right for you.

Personal injury protection (PIP)

In New Jersey, the minimum amount of PIP coverage required is $15,000 per accident or per person. However, it is recommended to purchase higher limits of up to $250,000 to ensure adequate protection in the event of a serious accident. The law allows for reduced premiums if lower limits of coverage are chosen, such as $15,000, $50,000, $75,000, or $150,000.

PIP covers a range of medical costs, including medical services, medication, surgical and hospital expenses, and rehabilitative costs. It also provides income continuation benefits, compensating for lost wages if injuries prevent an individual from working. The default coverage in New Jersey offers $100 per week for a $15,000-per-year policy, but this can be increased up to $5,200 per week, not exceeding the injured person's normal income. Essential services benefits of up to $12 per day are also included in PIP coverage, reimbursing for necessary services that an individual cannot perform due to their injuries, such as laundry, snow removal, or house cleaning.

In the unfortunate event of a fatality, PIP provides death benefits to the next of kin, including a maximum payout for lost income and essential services, as well as up to $1,000 for funeral expenses.

While PIP is a valuable coverage for all drivers in New Jersey, it is important to note that it does not cover everything. It excludes costs for emergency room visits or hospitalization for other drivers or their passengers, damage to vehicles involved in the accident, or damage to another person's property.

Uninsured/underinsured motorist coverage

In New Jersey, uninsured/underinsured motorist coverage is not mandatory, but it is a good idea to have it. This type of coverage protects you, your passengers, and your relatives living in the same household in the event of an accident caused by an uninsured or underinsured driver. It also covers hit-and-run accidents.

There are two types of uninsured/underinsured motorist coverage in New Jersey: bodily injury and property damage. Both are required. Uninsured/underinsured motorist bodily injury coverage pays for medical expenses, while uninsured/underinsured motorist property damage coverage pays for physical damage to your vehicle.

It's important to note that uninsured/underinsured motorist property damage coverage can only be used if the other driver is identified. If they cannot be identified, as in the case of a hit-and-run, your collision coverage will help pay for the damages to your vehicle.

The minimum limits for bodily injury coverage are $25,000 per person and $50,000 per accident. Property damage limits must be at least $25,000 on a standard policy. Your uninsured and underinsured motorist coverage limits are capped at your respective liability limits.

While New Jersey does not mandate drivers to carry collision or comprehensive insurance, if you finance or lease a vehicle, the lender or leasing company will typically require you to maintain both.

Frequently asked questions