New Jersey Car Insurance Laws

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Ross Martin

Insurance Writer

  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Renata Balasco

Senior Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist.…

Auto insurance requirements in New Jersey

Car insurance is required of all drivers in New Jersey. Motorists must also carry proof of this coverage while driving, which must be shown at the request of any law enforcement official. If you choose not to carry the required coverage, you leave yourself at risk and may face some stiff penalties. Learn more about New Jersey car insurance options and required coverages by having a look at our guide below.

Minimum liability coverage: 25/50/25 Liability policy options:
$25,000 bodily injury per person A standard policy, with typical bodily injury limits ($25,000/$50,000/$250,000/$500,000)
$50,000 bodily injury per accident A basic policy, with optional bodily injury coverage up to $10,000
$25,000 property damage per accident

Further requirements:

Personal Injury Protection (PIP) Uninsured/Underinsured Motorist Coverage Right to Sue
$15,000 PIP coverage per person (Primary or secondary to health coverage) Bodily injury $25,000 per person Limited or unlimited
Bodily injury $50,000 per accident

These are the requirements as stipulated by the state of New Jersey. However, a lender or leasing company could impose further coverage to protect the vehicle from physical damage. This is usually referred to as full coverage.

Liability coverage in New Jersey

New Jersey requires all drivers to carry liability coverage. This is a type of insurance that pays for property damage or bodily injury that you inflict on others in an at-fault accident. It’s critical to note that your own liability coverage does not cover your injuries or any damage to your own property. 

What are state-mandated car insurance limits?

The maximum amount that an insurance company will pay in the case of a claim is known as an insurance limit. For liability coverage limits can vary from one state to another. These limits are almost always split into three distinct categories: bodily injury per person, bodily injury per accident, and property damage. New Jersey’s liability limits are typically listed as 25/50/25 and explained in greater detail below:

  • $25,000 in bodily injury coverage per person is how much an insurer is willing to pay for a single person that you injure in an auto accident.
  • $50,000 in bodily injury coverage per accident is the maximum amount that an insurer will pay for all injuries that you cause in an accident in which more than one person is hurt.
  • $25,000 in property damage per accident is the total dollar amount an insurer will pay for damage that you cause in an accident.

Minimum PIP coverage in New Jersey is listed below:

  • $15,000 per person. This is the total that pays out for injuries suffered by anyone in your vehicle, including the driver, regardless of fault. Limits can be increased to better suit your needs.

Personal Injury Protection (PIP) in New Jersey

Personal injury protection is required in New Jersey and goes toward paying for your own injuries, covering medical costs that you and your passengers incur in an accident. It is available regardless of who was at fault. In New Jersey, this coverage can be coordinated with your health insurance or is offered as a stand-alone coverage for drivers that do not carry health insurance. It is important to check with your health insurance provider as to how or if they provide coverage for injuries resulting from auto accidents. Work loss, death benefit, and funeral expenses are not required but can be added to PIP to broaden coverage for you and your passengers.

The lawsuit options in New Jersey determine a driver’s ability to sue for pain and suffering resulting from an accident. Choosing the “limited” option restricts the policyholder and their household members’ right to sue for pain and suffering in an accident to extreme circumstances like death, permanent disfigurement, or loss of a body part in return for a lower premium. Selecting the “unlimited” option allows the policyholder to sue for pain and suffering regardless of the severity of the injuries. This is generally a much more expensive option.


New Jersey is a no-fault state for car insurance

Put simply, a no-fault insurance system requires that drivers carry their own protection. When an accident happens, no matter who is at fault, your own insurance foots the bill. Each driver takes care of himself or herself, and theoretically, the chances of someone suing or raising a hissy fit over culpability are lessened. And it guarantees every driver immediate medical treatment in the event of an accident.

Do New Jersey’s required minimums provide enough coverage?

New Jersey’s car insurance requirements are quite intricate, especially when compared with many other states. However, more insurance requirements don’t necessarily translate to the most robust coverage. The state’s liability coverage is quite low when compared to other states, which could leave you somewhat at risk if you cause extensive damages or injuries in an accident. In general, the state’s “basic” policy plan is not recommended, as it provides only enough coverage to be legal, but does not provide sweeping coverage. 

While the state’s PIP coverage is higher than some other states, New Jersey offers options to extend those limits or add coverage for things like funeral costs or loss of income, which should be considered. Also, keep in mind that New Jersey requires no coverage for your own vehicle. If you want to be fully protected, it might be a good idea to add extra coverage or increase current limits.

New Jersey’s penalties for driving without proof of insurance

New Jersey takes uninsured driving very seriously. If you are found guilty of driving without the proper insurance coverage in New Jersey, you can expect the following penalties:

Penalty 1st offense 2nd (or subsequent) offense
Fine $300-$1,000 Up to $5,000
Community service Determined by the court 30 days and/or imprisonment for 14 days
License suspension One year Two years

Optional car insurance coverage in New Jersey

New Jersey law requires liability, PIP, and uninsured/underinsured motorist coverages in order to be legal. Most insurance companies offer even more options for coverage that can go even further in protecting you. Here is a list of some of the more common options available:

  • Comprehensive: This coverage pays for vehicle damages in non-collision circumstances can help in the event that you owe more than your car is actually worth such as theft and damage related to weather events. 
  • Collision: This coverage pays for damages resulting from a collision with a vehicle or stationary object. 
  • Loan/lease payoff: Sometimes referred to as gap coverage, this coverage helps pay the difference between what’s owed on a loan and your car’s actual cash value. This
  • Rental car reimbursement: If your car is unable to be driven, this coverage will help pay for a rental car until yours can be fixed. 
  • Roadside assistance/towing and labor: Roadside assistance coverage can help when you suffer breakdowns or find yourself with flat tires, dead batteries, or in need of a tow.
  • Additional PIP: Increased PIP limits
  • Income continuation: If you are unable to work due to an accident, this coverage steps in to provide you with income that you may be missing out on. 
  • Extended medical benefits: Increased limits for medical expenses.
  • Funeral expense coverage: This can be added to PIP coverage to provide coverage in the event that you or a passenger perishes in an automobile accident.
  • Death benefit coverage: This can also be added to PIP coverage and ensures that your family continues to receive any benefits from your policy.

What is a CARCO inspection? 

Required in only a few states, this is an independent inspection that verifies the existence of your vehicle along with its options, accessories, mileage, and physical condition. Photos are taken of your vehicle and a report is then produced and sent to your insurance company. The state of New Jersey requires that vehicles are inspected before certain insurance coverages such as comprehensive and collision can be purchased. The inspection usually takes no longer than 15 minutes. 

Do I have to pay for a CARCO inspection?

No, these inspections do not require a fee. 

What paperwork is required?

You are not required to bring any paperwork, though you must provide the name of your insurer. Any relevant documents are welcomed, but not required. 

Where do I go for a CARCO inspection?

You’ll have to find a location near you and set up an appointment. Follow this link to find a location in your area. 

Why adhering to New Jersey’s car insurance requirements is important

While carrying car insurance in New Jersey is mandatory, it’s also a great way of protecting yourself and your assets. All motorists should consider adding more coverage options or at least increasing the current limits. However, those worried about a rise in premiums may want to begin the search for cheaper coverage. The Zebra can help get you started by giving you side-by-side insurance quotes from many of the nation’s top companies. Just enter your ZIP below to start saving. 

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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

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