Minimum Car Insurance Requirements In New Jersey

New Jersey has the lowest percentage of uninsured drivers in the U.S., with just 3% of drivers not having insurance, according to 2023 data from the National Association of Insurance Commissioners (NAIC).

It’s crucial to know what New Jersey’s insurance laws require, so you can stay properly covered and avoid penalties for driving without insurance. In New Jersey, drivers can choose between basic and standard coverage options.

With 9 years of experience in auto insurance, I’ve helped drivers like you understand the minimum coverage requirements and find the best policy to meet your needs. Keep reading to learn more.

Is Car Insurance Required In New Jersey?

Car insurance is required in New Jersey. Every driver in the state must have at least the minimum level of insurance coverage, which includes personal injury protection (PIP) and property damage liability. New Jersey also offers two types of coverage options: a no-fault system, where your own insurance covers injuries, and an at-fault system, where the driver responsible for the accident is liable.

Without insurance, you could face penalties, including fines or suspension of your driver’s license.

What Are The Minimum Car Insurance Requirements In New Jersey?

In New Jersey, the minimum car insurance requirement includes two main types of coverage: Personal Injury Protection (PIP) and liability coverage for property damage. Drivers must have at least $15,000 in PIP coverage to pay for medical expenses if they’re injured in an accident, regardless of who is at fault.

Additionally, drivers need at least $5,000 in property damage liability to cover damages to other people’s property. Bodily injury liability (optional) is $25,000 per person and $50,000 per accident. Uninsured/underinsured motorist bodily injury is $25,000 per person and $50,000 per accident.

There are also options for higher coverage limits, but these are the basic requirements to drive legally in the state.

Starting January 1, 2026, the minimum coverage limits for standard auto policies will be raised to the following:

• $35,000 for bodily injury liability per person
• $70,000 for bodily injury liability per accident
• $25,000 for property damage liability per accident
• Uninsured/underinsured motorist (UM/UIM) coverage equal to the minimum bodily injury liability amount

Is Minimum Coverage Enough?

Minimum coverage in New Jersey may not be enough to fully protect you in the event of an accident. While it meets the state’s legal requirements, the limits for liability and property damage are relatively low, which could leave you financially exposed if you’re at fault for significant injuries or damage.

The basic policy provides only enough coverage to avoid penalties but doesn’t offer much extra protection. If you have assets to protect or want more peace of mind, it’s a good idea to consider increasing your coverage limits or adding additional protection, such as comprehensive or collision coverage for your own vehicle.

Average Cost Of Car Insurance In New Jersey

The average cost of car insurance in New Jersey will vary based on factors like age and gender. Generally, younger drivers pay significantly more than older drivers for both minimum and full coverage.

According to the data, male drivers in their 50s tend to see the lowest rates, while female drivers typically experience the lowest rates in their 40s. These trends reflect how insurance companies assess risk, with younger drivers considered higher risk due to their lack of experience on the road.

New Jersey Car Insurance Laws

In New Jersey, drivers have the option to choose the state’s basic minimum-coverage policy, but it offers limited protection and does not include bodily injury liability coverage. Most drivers in the state prefer to buy a standard policy, which provides bodily injury liability, extra coverage, and higher policy limits.

Below, you can compare the basic and standard coverage options available in New Jersey. Keep in mind that all drivers must, at a minimum, have the coverage provided by the basic policy.

In New Jersey, the basic minimum car insurance coverage includes property damage liability of $5,000 per accident and personal injury protection (PIP) of $15,000 per person, per accident, with up to $250,000 for specific injuries. Bodily injury liability is optional, with a minimum of $10,000 per accident, and there is no coverage for uninsured/underinsured motorists. The right to sue is limited under this plan.

On the other hand, the standard policy offers more extensive coverage. Property damage liability increases to $25,000 per accident, with the option to go up to $100,000 or more. Personal injury protection also starts at $15,000 per person, per accident but can go up to $250,000 or higher, with a limit of $250,000 for specific injuries.

Bodily injury liability is included, with a minimum of $25,000 per person and $50,000 per accident, which can be raised up to $250,000 per person and $500,000 per accident. Standard policies also provide uninsured/underinsured motorist coverage up to the liability coverage limits, and drivers have the choice of either limited or unlimited rights to sue.

CARCO Inspection

In New Jersey, a CARCO inspection is a required process for certain types of car insurance, like comprehensive and collision coverage. It is an independent inspection where a professional checks your vehicle to confirm its existence, condition, mileage, and any additional features or accessories.

During the inspection, photos are taken, and a report is sent to your insurance company. This inspection usually takes about 15 minutes and must be completed before you can purchase specific insurance policies.

Special Automobile Insurance Policy

The Special Automobile Insurance Policy (SAIP) in New Jersey is a low-cost insurance option designed for certain residents who are eligible for Federal Medicaid with hospitalization coverage. Often called the “dollar a day” policy, it costs about $365 per year.

The SAIP offers very limited coverage, including emergency medical treatment after an accident, up to $250,000 for brain and spinal cord injuries, and $10,000 in death benefits for your family. It is a basic insurance plan meant for those who need minimal coverage but cannot afford traditional auto insurance. However, the SAIP is only available to a small group of eligible drivers.

Proof Of Insurance

In New Jersey, drivers are required to carry proof of insurance at all times when operating a vehicle. This proof can be shown in several ways, including a physical insurance card issued by your insurance company or a digital version stored on your smartphone.

New Jersey law mandates that all drivers have a minimum level of car insurance, and you must be able to present proof of this coverage if requested by law enforcement or when registering your vehicle. If you’re pulled over or involved in an accident, failure to provide proof of insurance can lead to fines, penalties, or even the suspension of your driver’s license.

Registration Information

To register your car in New Jersey, follow these steps:

1. Obtain car insurance: You must have at least the minimum required car insurance coverage in New Jersey.
2. Gather required documents: You’ll need proof of identity, proof of car ownership (such as a title or bill of sale), proof of insurance, and proof of residency.
3. Complete the registration application: Fill out the New Jersey Motor Vehicle Commission (MVC) registration form.
4. Pay the registration fee: Fees vary depending on the type of vehicle and its weight.
5. Visit an MVC office: Submit your application and documents in person at an MVC office, or complete the process online if eligible.
6. Get your license plates and registration: Once approved, you’ll receive your vehicle’s registration and license plates.

Uninsured Drivers in New Jersey

New Jersey has the lowest percentage of uninsured drivers in the U.S., at just 3%, according to 2023 data from the National Association of Insurance Commissioners (NAIC). However, this statistic doesn’t account for underinsured drivers, whose coverage may not fully cover your damages in an accident they cause.

Uninsured/underinsured motorist (UM/UIM) coverage can help fill this gap. A basic insurance policy doesn’t include UM/UIM coverage, but with a standard policy, you can add it to match the liability coverage limits you select.

Is Car Insurance Required In New Jersey If You Don’t Own A Vehicle?

Car insurance is required in New Jersey even if you don’t own a vehicle, but only if you drive one. If you regularly drive a car that isn’t yours, you need to have insurance coverage, either through a non-owner car insurance policy or by being added as an additional driver to the vehicle owner’s policy.

This type of policy provides liability coverage when you’re driving someone else’s car. If you don’t drive regularly, you may not need insurance, but if you’re caught driving without coverage, you could face penalties.

Legal Penalties For Driving Without Insurance

New Jersey treats uninsured driving as a serious offense. If you’re caught driving without the required insurance, you could face the following penalties:

Other Types Of Optional Coverage

Here are some common add-on coverages available in New Jersey:

• Collision Coverage: This helps cover the cost of repairs to your vehicle if you’re involved in an at-fault accident or if you’re hit by an uninsured driver. A deductible may apply, and collision coverage might not be available with a basic policy.
• Comprehensive Coverage: Comprehensive coverage pays for damage to your car caused by non-collision events, such as fire, flooding, theft, or vandalism. Like collision coverage, it may not be available with a basic policy, and a deductible may apply.
• Accident Forgiveness: This feature prevents your insurance premium from increasing after your first at-fault accident. It typically only applies to your first accident.
• Rental Car Reimbursement: If your car needs repairs after a covered claim, rental car reimbursement helps cover the cost of renting a car while yours is being fixed.