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New Jersey Car Insurance Requirements

New Jersey Minimum Car Insurance Requirements

As is the case with many states, New Jersey requires all drivers to carry car insurance. Where the state differs is in how many types of insurance you must carry along with their mandated minimum limits. Outlined below are the types of car insurance and their corresponding amounts you must carry in order to be a legal driver in the state of New Jersey.

Liability Insurance

  • $15,000 bodily injury per person
  • $30,000 bodily injury per accident
  • $5,000 property damage per accident

Personal Injury Protection (PIP)

  • $15,000 per person, per accident

New Jersey is also unique in the sense that drivers can choose between a basic policy and a standard policy when purchasing their car insurance coverage. A basic policy is the cheapest option, but you lose a lot of liability coverage. Uninsured/underinsured motorist coverage is also not available under the basic policy.

But no matter what policy you go with, you will still need to provide proof of insurance when asked to by law enforcement. Failure to do so has some harsh consequences. It is also important to note that if you lease your vehicle or have an auto loan, your lender or leasing company can require you to carry additional insurance.

No-Fault Insurance in New Jersey

As you may have noticed, New Jersey has requirements for carrying personal injury protection (PIP). A lot of this has to do with the fact they are a no-fault state, meaning after an accident, no matter who was deemed responsible for it, you would have to file claims with your own insurance to cover medical expenses. This is where PIP coverage will come in. In some cases, if injuries are severe enough, you can file claims through the other driver’s liability insurance for extra assistance.

New Jersey Liability Insurance

Liability insurance covers two aspects of an accident: bodily injuries and property damage. This coverage will come into play if you are found to be at fault for the accident. It will help cover things like medical bills and auto repairs expenses the other driver accumulates as a result of your negligence. It is important to remember that your liability insurance will never cover any injuries you sustain, nor will it apply to auto repair bills you have.

New Jersey Personal Injury Protection (PIP)

As touched on briefly, PIP coverage is required in the state of New Jersey. This has some to do with the fact the state is a no-fault insurance state. With PIP coverage, drivers will have their medical expenses covered by their own insurance policies. This helps speed up the process and tries to prevent any disagreements between drivers. In the state of New Jersey, PIP coverage can be correlated with your current health insurance policy or is able to stand alone on your policy. Whichever way you go about it, you need it, and it will offer some valuable assistance when it comes to medical bills.

CARCO Inspection in New Jersey

CARO inspection is required in only a few states, and New Jersey is one of them. This independent inspection verifies that your vehicle actually exists and takes note of its features, including milage and physical condition. Photos of it are then taken and shared with your insurer. This is required in the state of New Jersey why you are trying to obtain comprehensive and collision coverage. The inspection takes about 15 minutes and is done at no charge to you.

Car Insurance Limits in New Jersey

Coverage limits refer to the maximum amount of money your insurance will payout in the event of a claim. At the same time, limits also are also the minimum amount of insurance you must carry as mandated by the state. In New Jersey, liability insurance limits are expressed as 15/30/5, with each of the numbers representing a different aspect of liability coverage. What these categories cover is outlined below.

  • Bodily injury per person is the maximum amount of money your insurer will pay for a single person’s injuries in an accident you caused.
  • Bodily injury per accident is how much your insurance company will pay for all injuries you have caused in an accident.
  • Property damage per accident is the amount of money your insurance company will payout for damage you caused in an accident.

Is New Jersey’s Mandatory Insurance Minimums Enough Coverage?

New Jersey car insurance requirements are a bit better than other states, but despite this, the mandated minimums are still not adequate enough to cover you decent coverage. It is highly recommended that you increase coverage limits and utilize policy add-ons when you are going to obtain a car insurance policy. If you only carry $5,000 in property damage coverage, that can leave you on the hook for a lot of bills. $5,000 will barely even make a dent in the cost for a brand new vehicle should you total someone else’s. And medical expenses can also stack up fast, meaning you need property PIP coverage. Keep in mind that anything not covered can land up back in your lap.

Driving Without Insurance in New Jersey

Since the state of New Jersey requires all drivers to carry car insurance, failing to comply has some unfortunate consequences. Listed below are what you could be facing should you decide to drive without insurance in New Jersey.

  • A fine ranging anywhere from $300-$5,000, depending on the circumstances of your case
  • Points added to your driving record
  • Possible community service
  • License suspension
  • Potential imprisonment, depending on your case

Additional Types of Car Insurance in New Jersey

While New Jersey requires drivers to carry a few different types of car insurance, there are still many ways to expand your coverage. Listed below are some common policy add-ons you can utilize to strengthen your insurance plan.

  • Collision: Collision coverage helps pay for damage your car sustains in an accident with another vehicle.
  • Comprehensive: This coverage protects your car against non-collision-related damage. Some perils covered under this policy include theft and extreme weather.
  • Gap Coverage: Should your car be totaled before you can pay off your auto loan, gap coverage can help pay the difference between what you have left on the loan and your vehicle’s actual can value.
  • Roadside Assistance: If your car breaks down on the highway, roadside assistance can be there to help fix a variety of mechanical issues.
  • Rental Car Reimbursement: If your car ends up in the shop for an extended period of time following an accident, this coverage will help pay for you to get a rental car until your vehicle is fixed.

Car Insurance is Important For Any New Jersey Driver

While maintaining a car insurance policy is the law in New Jersey, you should not only obtain the mandated minimum amount just to stay on the right side of the law. Insurance can offer very valuable protection to you and your assets. You will want to take your time to analyze coverage limits and policy add-ons. It can seem tedious at first, but you will be glad you did it should you find yourself in a severe accident.

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