Understanding New Jersey's Auto Insurance Coverage Minimums

Auto insurance is mandatory in New Jersey, and the type and cost of that coverage can vary significantly. The minimum amount of auto insurance coverage in New Jersey is $15,000 per person for bodily injury liability, with a total maximum of $30,000 per incident, and $5,000 for damage to another person's property. However, as of January 1, 2023, the mandatory insurance minimums have increased to $25,000 bodily injury liability per person, $50,000 per accident, $25,000 property damage liability per accident, and $15,000 personal injury protection (PIP). Additionally, New Jersey is a no-fault state, which means that drivers are required to carry personal injury protection (PIP) insurance with a minimum amount of $15,000 per person or per accident.

Bodily injury liability

In New Jersey, the minimum bodily injury liability coverage is $25,000 per person and $50,000 per accident. These limits are set to increase in 2026 to provide better financial protection for drivers, with the new minimums being $35,000 per person and $70,000 per accident. While these limits are the legal requirement, it is worth considering purchasing additional coverage to ensure you are fully protected in the event of a significant accident.

It is important to note that bodily injury liability insurance does not cover your own medical costs or damage to your vehicle. For that, you would need to purchase additional coverage, such as personal injury protection or medical payments coverage, and collision insurance, respectively.

The cost of bodily injury liability insurance varies depending on factors such as your driving history, coverage limits, the type of car you drive, and the policy limits you choose. While the minimum coverage may be tempting to keep costs down, it is recommended to have enough liability coverage to protect your assets in the event of a lawsuit.

Property damage liability

The minimum property damage liability coverage required in New Jersey is $25,000 per accident. This means that if you are at fault in an accident and cause damage to someone else's property, your insurance will cover up to $25,000 of the repair or replacement costs. It is important to note that this coverage does not apply to damage to your own vehicle; it only covers damage to another person's property.

While the minimum coverage is $25,000, it is worth considering purchasing additional coverage. The minimum property damage liability limit may not be sufficient to cover the full cost of repairs or replacements, especially if you damage a luxury vehicle or cause extensive damage. By increasing your property damage liability coverage, you can have greater peace of mind knowing that you are better protected financially in the event of an accident.

Additionally, it is important to remember that property damage liability coverage does not include damage caused by weather-related accidents or collisions with animals. If you want protection against these types of incidents, you may need to add comprehensive coverage to your policy, which is subject to a deductible.

When purchasing auto insurance in New Jersey, carefully review the property damage liability coverage offered by different insurance providers. Consider your financial situation, the value of your assets, and the potential costs of repairs or replacements. While the minimum coverage is a legal requirement, it may not provide sufficient protection in the event of a significant accident. By choosing a policy with higher coverage limits, you can ensure that you are adequately protected and reduce your financial risk.

Personal injury protection (PIP)

The minimum coverage amount for PIP in New Jersey is $15,000 per person or per accident, but drivers can opt for higher coverage limits of $250,000 or more. This coverage is designed to pay up to a certain limit for economic losses, including medical and health expenses, lost earnings, and other necessary expenses related to injuries sustained in a car accident. For instance, if you have a $10,000 PIP policy and sustain $15,000 in medical treatment costs from an accident, your PIP would cover the first $10,000.

In addition to the monetary benefits, PIP also provides non-monetary benefits. It ensures that individuals injured in auto accidents receive the necessary medical care and can restore their health and productivity as swiftly as possible. PIP also simplifies the claims process by eliminating the need to determine fault, which can often lead to lengthy legal battles.

It is important to note that while PIP covers medical expenses, it does not cover auto body repairs or damage to another party's vehicle or property. It is also subject to certain exclusions, such as driving while intoxicated or causing intentional injury.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage comes into effect when you are involved in an accident with a driver who does not have any auto insurance. This type of coverage will pay for your injuries, your passengers' injuries, and damage to your vehicle. It is crucial as it ensures that you are not left bearing the financial burden of medical bills or vehicle repairs out of your own pocket. Even if the other driver is at fault, without this coverage, you may have to rely on your own policy, which may not provide sufficient coverage for such scenarios.

Underinsured motorist coverage, often offered alongside uninsured motorist coverage, comes into play when the at-fault driver does not have enough insurance coverage to pay for the damages or injuries they caused. This coverage ensures that you can receive adequate compensation for your injuries and property damage, even if the other driver's policy limits are insufficient.

In New Jersey, the minimum requirements for uninsured/underinsured motorist coverage are $25,000 per person and $50,000 per accident for bodily injury. These limits are set to increase in 2026 to provide better financial protection for drivers, with the new minimum limits being $35,000 per person and $70,000 per accident.

While these coverages are mandatory in New Jersey, it is important to note that they may not cover all expenses. For instance, they typically do not include a deductible for property damage claims, and there may be limits on the coverage for repairs to your vehicle. Additionally, they do not cover damage to your vehicle if you are at fault or if the damages exceed your policy limits.

Collision and comprehensive coverage

Collision Coverage

Collision coverage pays for any damage to your car that occurs from hitting another car or object, such as a tree or a building. It also covers damage from a single-vehicle rollover. If you are in an at-fault accident or are hit by an uninsured driver, collision coverage will help pay for the damage to your vehicle. A deductible may apply, and if you have a basic policy, collision coverage may not be offered.

Comprehensive Coverage

Comprehensive coverage pays for vehicle damage related to non-collision incidents, like fire, flooding, theft, and vandalism. Like collision coverage, comprehensive coverage may not be available to those with a basic policy, and a deductible may apply.

Cost of Collision and Comprehensive Coverage

The cost of collision and comprehensive coverage depends on several factors, including your driving and claims history, your insurance company, and your chosen deductible. According to the Insurance Information Institute (III), the average annual cost of comprehensive coverage is $134, while collision coverage costs around $290. In New Jersey, the average cost of comprehensive coverage is about $130, and collision coverage costs around $422.

Unless you have a lease or loan on your vehicle, collision and comprehensive coverage are not required in New Jersey. However, it is essential to consider the value of your car and your ability to pay for repairs or replacement in the event of an accident. If you cannot afford to pay for repairs or replacement, collision and comprehensive coverage may be a wise investment.

While collision and comprehensive coverage are not mandatory in New Jersey, they can provide valuable financial protection in the event of an accident or vehicle damage. It is important to review your policy and consider your specific needs and circumstances when deciding whether to add these coverages to your auto insurance policy.

Frequently asked questions