Auto Insurance Requirements In New Jersey: What You Need To Know

Auto insurance is mandatory in New Jersey, and the type and cost of coverage can vary significantly. The state has its own set of minimum coverage requirements, which include liability insurance and personal injury protection (PIP). Drivers must carry proof of insurance at all times and can face penalties for driving without insurance, including fines, license suspension, and even jail time. New Jersey also offers a Basic Policy with lower coverage limits and a Standard Policy similar to those in other states. Understanding these requirements is crucial for drivers in New Jersey to ensure they are compliant and have the necessary protection in case of an accident.

Liability insurance

The minimum liability insurance requirements in New Jersey are:

• $25,000 bodily injury liability per person
• $50,000 bodily injury liability per accident
• $25,000 property damage liability per accident

These minimums are set to increase on January 1, 2026, to:

• $35,000 bodily injury liability per person
• $70,000 bodily injury liability per accident
• $25,000 property damage liability per accident

While you can get by on minimum insurance requirements for injury liability and property damage, it may be worth buying extra coverage. Minimum liability insurance may leave you with substantial out-of-pocket expenses in the event of a significant accident and won't cover any damage to your own car if you cause the accident.

Personal injury protection (PIP)

The minimum amount of PIP coverage required in New Jersey is $15,000 per person or per accident, but drivers can choose to increase their coverage limit to $250,000 or more. This coverage amount is the maximum that the insurance company will pay for medical expenses related to injuries sustained in an automobile accident. PIP coverage is available in different amounts, and the specific coverage chosen will determine the maximum amount the insurance company will pay.

PIP is designed to cover the cost of necessary medical care, including healthcare expenses and lost income. If the cost of medical care exceeds the policy's PIP limits, health insurance may cover further expenses. It's important to note that PIP policies have a per-person maximum coverage limit, meaning that coverage is limited to a certain amount per person if multiple people are injured in an accident.

In addition to New Jersey, PIP auto insurance is required in 14 other states and Puerto Rico. While minimum coverage requirements vary by state, maximums are typically set by insurance companies and usually do not exceed $25,000. As of January 1, 2026, the new mandatory minimum for PIP coverage in New Jersey will be $15,000.

Uninsured motorist coverage

In New Jersey, uninsured motorist coverage is one of three types of insurance that all drivers are required to have. The other two are liability insurance and personal injury protection (PIP). Liability insurance pays for damages that you cause if you are responsible for an accident, while PIP pays for medical expenses if you or other persons covered under your policy are injured in an automobile accident, regardless of who is at fault.

In some states, you can also purchase uninsured motorist property damage (UMPD) coverage, which pays for damage to your car if it is hit by an uninsured driver. However, collision coverage, which is optional and available in every state, can also cover vehicle damage, regardless of whether the other driver is insured.

Underinsured motorist (UIM) insurance is similar to uninsured motorist coverage but applies when the at-fault driver has insufficient insurance to cover your medical bills and other expenses. UIM is sometimes packaged with uninsured motorist coverage.

If you live in a state that requires uninsured motorist coverage, you must purchase at least the state's minimum. The minimum will typically be set at the same level as your liability coverage amounts. For example, if your liability limits are $100,000 for injury to one person and $300,000 for injuries in one accident, you would need to buy uninsured motorist coverage of $100,000 per person and $300,000 per accident.

Collision coverage

All drivers in New Jersey are required to have auto insurance. The state has specific requirements for the types of insurance coverage that drivers must carry, and these requirements have recently changed, with further changes expected in 2026. The mandatory insurance minimums as of January 1, 2023, are as follows:

• $25,000 bodily injury liability per person
• $50,000 bodily injury liability per accident
• $25,000 property damage liability per accident
• $15,000 personal injury protection (PIP)
• $25,000 uninsured/underinsured motorist bodily injury per person
• $50,000 uninsured/underinsured motorist bodily injury per accident

Now, let's focus on collision coverage.

When purchasing collision coverage, a deductible may apply, meaning you will need to pay a certain amount out of pocket before the insurance company covers the rest. The deductible amount can vary depending on your policy and insurance provider, so it is important to review the details of your specific plan. Additionally, if you have a basic insurance policy, collision coverage may not be available as an option. Basic policies are designed for those with minimal assets and family responsibilities, offering lower protection at a more affordable cost.

It is also important to note that New Jersey requires a photo inspection of your vehicle before adding collision coverage to your policy. This ensures that the insurance company has an up-to-date record of your vehicle's condition and can accurately assess any damage that occurs in a collision. The photo inspection is a standard step in the process of obtaining full coverage for your vehicle.

While collision coverage is not mandatory, it can provide valuable protection in the event of an accident. It ensures that you have the financial means to repair or replace your vehicle, regardless of who is at fault. When deciding whether to include collision coverage in your policy, consider the potential costs of repairing or replacing your vehicle without insurance. If you decide to purchase collision coverage, be sure to review the specific terms, conditions, and exclusions of your policy to fully understand your coverage and any associated costs.

Comprehensive coverage

All vehicles registered in New Jersey are required to have three types of insurance: liability insurance, personal injury protection (PIP), and uninsured motorist coverage. However, drivers can also choose to purchase additional coverage options to suit their needs, such as comprehensive coverage.

In New Jersey, comprehensive coverage is available as an option for drivers. It is important to note that this coverage may not be included in a basic policy and might only be offered by certain insurers. Additionally, a photo inspection of your vehicle is required before adding comprehensive coverage to your policy.

When considering comprehensive coverage, it is essential to understand its limitations. While it covers a wide range of non-collision incidents, it typically does not include damage to another person's property. Additionally, comprehensive coverage may not be available as part of a basic auto insurance policy, so it is important to review your policy details and discuss your options with your insurance provider.

Frequently asked questions