New Jersey Car Insurance Requirements in 2024

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Written by Jamie Johnson Edited by Nick Versaw

Updated February 20, 2024

Like most states, New Jersey law requires licensed drivers to meet its minimum insurance requirements. That being said, New Jersey’s auto insurance requirements vary a bit when compared to other states, so it’s important to fully understand what you need to purchase when you’re shopping for a new auto insurance policy.

For example, New Jersey is one of 12 no-fault states, meaning each driver’s insurance covers their own medical expenses, regardless of who’s at fault for the auto accident.

We’ll review everything you need to know about auto insurance in New Jersey, including what coverages the state requires you to buy and the minimum limits for each.

What Are New Jersey’s Car Insurance Requirements?

New Jersey state law requires you to be able to show proof of car insurance when operating a vehicle anywhere in the state. Driving without insurance can result in fines and possibly cause you to lose your license.

The minimum car insurance requirements in New Jersey are 25/50/10. That means you need to purchase at least $25,000 in bodily injury liability coverage per person, $50,000 in bodily injury coverage per accident, and at least $10,000 in property damage coverage.

New Jersey previously had some of the lowest car insurance requirements in the country. But the passage of Bill S482 made some changes and doubled the minimum coverage for drivers in the state. This new law implemented the first increase in 2023, and a second increase is coming in 2026.

All New Jersey drivers can choose from two different levels of coverage — a “basic” policy or a “standard” policy. The basic policy offers less protection and comes with a limited right to sue, while the standard policy provides more coverage and offers a limited and an unlimited right to sue option.

Let’s take a closer look at each of these requirements.

Liability insurance in New Jersey

Liability insurance has two main parts — bodily injury and property damage liability. Bodily injury liability coverage pays for injuries to other drivers and their passengers in an accident you caused. Property damage liability pays for damage you cause to the other driver’s vehicle or other property.

New Jersey’s standard policy comes with coverage as low as $25,000 per person and $50,000 per automobile accident. If you choose the basic policy, coverage is optional with a lower $10,000 limit per accident.

Personal injury protection (PIP) in New Jersey

Personal injury protection (PIP) provides medical coverage for injuries to you and other drivers after an accident. It pays for your medical costs and any lost wages resulting from injuries from the accident.

PIP coverage is often called “no-fault coverage” because it pays for your medical expenses regardless of who caused the accident. PIP requirements are the same under the standard and basic policies — both come with a $15,000 limit per accident.

Uninsured motorist coverage

Uninsured motorist coverage protects you if you’re involved in an accident with an uninsured driver. Only 3.1% of New Jersey drivers are uninsured, according to the Insurance Information Institute (Triple-I) — the lowest uninsured motorist rate in the country. Still, this coverage offers valuable protection for all New Jersey drivers.

Uninsured motorist coverage isn’t included under the basic policy. It’s optional under the standard policy, with coverage limits equal to or less than your bodily injury liability limits.

Penalties for Driving Without Car Insurance in New Jersey

New Jersey law requires all drivers to have adequate car insurance, and if you’re caught without it, you’ll have to pay hefty fines and could even lose your license. A first offense could result in a $300–$1,000 fine and up to a year’s license suspension.

Repeated offenses have even harsher penalties — a second offense could lead to a $5,000 fine, 14 days in jail, and community service for 30 days. You’ll also lose your license for two years, and once that period is up, you’ll have to apply to the director of the Division of Motor Vehicles for reinstatement.

New Jersey Car Insurance Laws You Should Know About

All New Jersey drivers can choose between the standard and basic policies. Both policies provide the minimum coverage requirements, but the standard policy includes an option for a limited or unlimited right to sue. Let’s look at how both options work.

Limited right to sue

If you choose Limited right to sue, you agree not to sue the at-fault driver for pain and suffering unless you sustained one of the following permanent injuries:

• Loss of a body part
• Significant disfigurement or scarring
• A displaced fracture
• Loss of a fetus
• A permanent injury that won’t ever fully heal
• Death

Unlimited right to sue

If you choose this option, you have the right to sue the person who caused the accident for pain and suffering due to any injury.

Are New Jersey Minimum Car Insurance Requirements Enough?

New Jersey’s minimum car insurance requirements are low, which can pose a serious financial risk. Having inadequate coverage leaves you vulnerable to additional costs and potential lawsuits.

For example, the average cost of a new vehicle in the U.S. is $48,008, according to Kelley Blue Book (KBB). If you have only the required $10,000 in property damage coverage, you’d be left with an out-of-pocket expense of more than $38,000 if you hit and total the average new car.

And while $50,000 in total bodily injury liability may sound like a lot, it’s unlikely to cover all the costs involved if multiple people are seriously injured in an accident you cause.

It’s a good idea to talk to a licensed insurance agent who can assess your situation and make recommendations about how much coverage you need.

Optional car insurance coverage in New Jersey

With 1,259 people per square mile, New Jersey is the most densely populated state in the country. Having more drivers on the road puts you at higher risk for a serious car accident. And with the minimum limits being quite low in New Jersey, it’s probably worth looking into additional coverage types to make sure you’re fully protected.

Here are a few of the most common additional coverage options to consider purchasing:

Many drivers are hesitant to purchase additional coverage because they want to keep costs down. Understanding the average costs of car insurance in your state will help you be better informed when buying insurance products.

With that in mind, let’s take a look at the average costs for car insurance in New Jersey.

How Much Does Car Insurance Cost in New Jersey?

When you’re looking for auto insurance, you have to decide whether you want to purchase basic liability or full-coverage insurance. Liability-only coverage pays for damage to the other driver’s vehicle and covers their medical costs, but it doesn’t cover you or your vehicle. On the other hand, full coverage pays to repair or replace your vehicle.

The data in the table below shows the seven cheapest car insurance companies in NJ and each insurer’s average rates.

On average, New Jersey drivers pay $202 per month for liability insurance and $410 for full coverage. GEICO has the cheapest rates for both, but since your premiums are based on several factors, it’s always important to shop around and compare rates from multiple companies before purchasing your next policy.

New Jersey Auto Insurance FAQs

Having adequate insurance coverage ensures you’re financially protected and meet the legal requirements in New Jersey. Here’s some additional information about buying an auto policy in New Jersey, based on common questions from drivers like you.

What types of insurance does New Jersey require?

New Jersey requires three types of coverage — liability, personal injury protection (PIP), and uninsured motorist coverage. Failing to show proof of insurance can result in hefty fines, losing your license, and possible jail time.

Is New Jersey a no-fault auto insurance state?

Yes, New Jersey is one of 12 no-fault insurance states, but the law comes with more nuance in New Jersey than in most states. If you purchase a standard auto insurance policy, you can choose between a limited and an unlimited right to sue.

A limited right to sue means you can only sue for pain and suffering if you sustain certain permanent injuries or die. In contrast, an unlimited right to sue means you can sue for pain and suffering regardless of the injury’s severity.

Does your car have to be insured before you can register it in NJ?

Yes, you need proof of insurance to register your car in the state of New Jersey. This is fairly common, as most states require you to purchase car insurance first and then register your vehicle.

Is uninsured/underinsured coverage worth it?

Yes, this coverage protects you if you’re in an accident with an uninsured or underinsured driver. Liability insurance alone won’t protect you against an uninsured motorist, and this coverage is usually pretty affordable.

Is state-minimum coverage enough in New Jersey?

It depends on your situation, but the state-minimum coverage is too low for most New Jersey drivers. Buying more coverage gives you greater financial protection and peace of mind. If you finance or lease your vehicle, your lender may require you to purchase collision and comprehensive insurance, as well.

Methodology:

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.

Sources:

1. New Jersey Motor Vehicle Commission, “Insurance Requirements,” Accessed February 5, 2024.
2. HG.org, “New Jersey No-Fault Laws and Medical Expense Coverage,” Accessed February 5, 2024.
3. Hasson Law Offices, “What To Know About New Jersey Minimum Coverage Limits,” Accessed February 5, 2024.
4. State of New Jersey Department of Banking and Insurance, “New Jersey’s Basic Auto Insurance Policy,” Accessed February 5, 2024.
5. NJ.gov, “New Jersey Auto Insurance Buyer’s Guide,” Accessed February 5, 2024.
6. Insurance Information Institute, “Facts + Statistics: Uninsured motorists,” Accessed February 5, 2024.
7. Justia, “Section 39:6B-2,” Accessed February 5, 2024.
8. NJ Spotlight News, “NJ is the most densely populated state,” Accessed February 5, 2024.

Jamie Johnson Insurance Writer

Jamie Johnson is a Kansas City-based personal finance writer whose work has been featured on several of the top finance and business sites in the country, including Insider, Credit Karma, Bankrate, Rocket Mortgage, Fox Business, Quicken Loans, and The Balance. For the past six years, she's dedicated more than 10,000 hours of research and writing to more than 2,000 articles about personal finance topics.