New Jersey Car Insurance Laws: How Much Coverage Do I Need (2024)?

All New Jersey drivers with a standard policy must have liability coverage following a 25/50/25 pattern to comply with state-mandated limits.
Written by Amy Bobinger
Edited by R.E. Fulton
New Jersey car insurance
laws require drivers to have 25/50/25 liability coverage, 25/50 uninsured/underinsured motorist protection, and $15,000 in personal injury protection to meet the state-mandated
car insurance

Car insurance requirements in New Jersey

When you’re buying car insurance in New Jersey, we recommend that you start with at least the coverage limits included in the Standard plan, although you can add more coverage for additional protection.1

Standard plan

The Standard plan includes at least the following
liability insurance
  • $25,000 of
    bodily injury liability
    coverage per person
  • $50,000 of bodily injury liability coverage per accident
  • $25,000 of property damage liability coverage
Liability insurance helps pay for the other party’s medical expenses (bodily injury liability) and vehicle repairs (property damage liability) after an accident that you cause. It will also help pay for an attorney if you’re sued after an at-fault accident.
The Standard plan also includes:
If you’re in an accident with an uninsured driver, uninsured motorist coverage (UM) will help pay for your property damage and medical bills, up to your coverage limits. If you’re in an accident with an insured driver but their liability insurance doesn’t pay for all of your damages, underinsured motorist coverage (UIM) will help pay for the difference, up to your policy limits.
app screenshot
makes it easy to get the best price for your New Jersey auto insurance.
Jerry works with 55+ carriers to find you insurance quotes. In seconds, you can compare quotes from multiple carriers, ensuring you find the best coverage at the best rate.
SPLIT LIMIT VS SINGLE LIMIT: Some New Jersey insurance companies will allow you to purchase combined single-limit insurance, which means that instead of separate limits for bodily injury and property damage, your insurance will cover one set amount that can be divided up as needed.2

NJ offers two low-cost plans, but we don’t recommend them

New Jersey drivers are given the option to choose two low-cost, low-protection options: the Basic plan and the Special Automobile Insurance Policy (SAIP). But neither of these offer enough coverage if you get into an accident—stick to the Standard plan if you need to keep your costs low.

Basic plan 

New Jersey’s Basic plan is better than driving uninsured—but it could still leave you seriously lacking in protection after an accident.3 
Basic plan details:
  • Does not include bodily injury liability, but you have the option to add $10,000 per person per accident.
  • $5,000 property damage liability per accident
  • $15,000 personal injury protection (PIP) per person per accident
  • Automatically enrolled in “Limitation on Lawsuit” option (more on that below)
Some insurers may give you the option to add comprehensive and collision insurance to cover your own vehicle, but they’re not required to offer it as part of the Basic plan. Uninsured/underinsured motorist protection is not available as part of the Basic plan.

SAIP: Special Automobile Insurance Policy

New Jersey’s SAIP program is more commonly known as “
dollar-a-day insurance
” because the plan costs $365 a year (or $360 if you pay the whole year at once). SAIP is only available if you’re enrolled in federal Medicaid with hospitalization.
SAIP provides: 
  • $250,000 for emergency trauma care immediately after an accident, or treatment of serious brain or spinal cord injuries due to an accident
  • $10,000 death benefit
SAIP does not cover injuries or property damages to other drivers, and it will not cover damage to your vehicle. 

New Jersey is a choice no-fault state

If you get into an accident in a
no-fault state
, you file a claim with your own insurance company for any injury-related costs, regardless of who caused the collision.
When you purchase a New Jersey auto insurance policy, you’ll be given the choice between “unlimited right to sue” and “limited right to sue.”4  Here’s what that means:
  • Limited right to sue (no-fault insurance): Also called the Limitation on Lawsuit option, you can only sue another driver for pain and suffering from serious, permanent injuries or death. In exchange, your car insurance premium will be lower.
  • Unlimited right to sue: You have full right to sue another driver for pain and suffering after a car accident, but you also open yourself up to the right to be sued—and your auto insurance costs will be higher.
As part of New Jersey’s no-fault car insurance coverage, you must carry personal injury protection (PIP).5
What it covers: PIP helps cover medical expenses, lost wages, and more for you and your passengers after an accident, regardless of fault.
PIP limits: You must carry at least $15,000 in PIP, but you can raise those limits to as much as $250,000 if you’re enrolled in the Standard plan.
Additional protection: No matter what PIP limits you choose, you’ll have up to $250,000 in coverage for serious, permanent injuries like disfigurement, spinal cord injuries, or brain injuries.
Health Care Primary Option: If your health insurance covers injuries due to a car accident, you can choose the Health Care Primary option and waive PIP coverage. Medicare and Medicaid can not be used with the Health Care Primary option.
If you enroll in the Standard policy, you can expand your PIP with Extra PIP Package Coverage. It includes:
  • Income continuation: Helps pay for lost wages due to the accident, up to your selected coverage amount.
  • Essential services: Helps cover the cost of hiring someone to do things you normally take care of after an accident, like cooking, caring for children, or doing yard work. Sometimes called replacement services.
  • Death benefit: Pays income continuation and essential services benefits to your spouse and dependents if you’re killed in a car accident.
  • Funeral expense benefit: Pays reasonable expenses toward burial if you are killed in a car accident.

Is minimum coverage the most cost-effective option?

Choosing the state’s minimums included in the Standard plan could leave you underinsured. 
A serious accident can easily exceed New Jersey’s minimum liability limits—and if you are at fault for the accident, you could be sued for any damages your insurance doesn’t pay for.
On top of that, liability insurance won’t cover damages to your vehicle at all. 
We recommend raising your liability limits to at least 100/300/100. Consider increasing your PIP coverage and adding collision and comprehensive to your policy, as well.
If you raise your liability limits under the Standard plan, you’ll be able to increase your uninsured/underinsured motorist coverage to those same limits.
app screenshot
When you shop for insurance quotes with Jerry, you can easily adjust your liability limits and coverage options in the app.
That makes it easy to get an idea of what you’ll pay for additional protection.
If you get a car loan or you lease a vehicle, your lender will typically require you to carry comprehensive and collision coverage as part of your insurance policy. If you don’t purchase it, they can
buy it for you
and add the cost to your car note—but that will cost a lot more than adding it to your policy yourself.

Average cost of liability insurance in New Jersey

The average annual cost of full coverage auto insurance in New Jersey is $3,007, while the cost of liability-only insurance is $2,112. New Jersey typically has insurance rates that are higher than the national average, likely due to the dense population, traffic congestion, and insurance requirements.
Keep in mind: These are just rough estimates. The actual rates you pay are determined by many variables, such as the type of vehicle you drive, your driving record, your claims history, your precise location, your credit score, and more. As a result, your actual premiums for insurance may be significantly higher or lower than the examples given.

Optional coverages in New Jersey

  • Comprehensive coverage
    can help pay for damage to the vehicle that isn't the result of a collision, such as theft or vandalism.
  • Collision coverage
    can cover the cost of repairing your vehicle if it collides with another vehicle or a fixed object.
  • Gap insurance
    can help cover the difference between your car loan and the payout you get for your vehicle if you total a financed car while you still owe more than it’s worth.
  • Towing and labor
    (also known as roadside assistance) helps with tasks such as replacing flat tires, towing, and jump-starting batteries—the level of coverage varies from company to company.
  • Rental car reimbursement
    will cover the cost of a rental vehicle up to per day/per policy limits while your car is being repaired as a result of a claim.
NEED TO KNOW: STANDARD DEDUCTIBLE Some coverages, including comprehensive and collision, require you to pay a deductible before your insurance will cover your claim. The standard deductible in New Jersey is $750, but you can choose a higher or lower deductible if you’d prefer.6  Keep in mind that the lower your deductible, the higher your premium will be.

Penalties for driving without insurance in New Jersey

If you’re caught driving without insurance in New Jersey, the penalties could include:7
  • Fine of $300 to $1,000
  • Community service
  • Driver’s license suspension for up to a year (may be reduced or dismissed with valid proof of insurance)
If law enforcement finds you driving without insurance a second or subsequent times, the penalties might include:
  • Fine of up to $5,000
  • Imprisonment for 14 days
  • Community service for 30 days
  • Driver’s license suspension for up to two years
Compare auto insurance policies
No spam or unwanted phone calls · No long forms
Find insurance savings


What are the car insurance requirements in New Jersey?

The standard New Jersey car insurance liability limits are $25,000 in bodily injury liability insurance per person, $50,000 in bodily injury liability per accident, and $25,000 in property damage liability per accident. It also includes $25,000 uninsured/underinsured motorist coverage (UM/UIM) per person and $50,000 per accident, as well as $15,000 in personal injury protection (PIP). The state also offers lower limits with less coverage.

Does your car have to be insured in New Jersey?

Yes, all cars registered and/or garaged in the state of New Jersey must be covered by car insurance.

Do you insure the car or the driver in New Jersey?

While vehicle-specific coverages like comprehensive and collision will always only follow your vehicle, some auto insurance coverages—like PIP or liability insurance—may cover you if you’re driving a different vehicle.

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings