How much liability insurance do I need in New Jersey? This question is about Cheap Car Insurance in New Jersey

How much liability insurance do I need in New Jersey?

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This question is about Cheap Car Insurance in New Jersey

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@WalletHub • 04/15/21 This answer was first published on 04/16/21 and it was last updated on 04/15/21.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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In New Jersey, you need $5,000 in property damage liability insurance to drive legally, as well as $15,000 in personal injury protection (PIP) (up to $250,000 for certain injuries). Unlike most other states, New Jersey does not require every driver to carry bodily injury liability insurance.

Even though New Jersey’s no-fault system means that drivers file injury claims with their own policy, the at-fault driver can be sued if they cause an accident that results in death, dismemberment, significant disfigurement or scarring, or another serious injury. As a result, it’s a good idea to purchase bodily injury liability insurance, anyway, since it can help cover legal fees and other expenses if you cause a serious accident. And no matter what, you should be sure to fulfill the minimum New Jersey car insurance requirements to avoid facing consequences for driving without insurance.

Finally, drivers should also consider purchasing other types of car insurance in order to better protect themselves, given that liability insurance does not provide any coverage for the policyholder’s own injuries or property. For instance, collision insurance covers damage to the policyholder’s car regardless of fault. And comprehensive insurance pays if the policyholder’s vehicle is damaged by something besides an accident, like a natural disaster or vandalism.

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When to Carry Only the Minimum Liability Coverage

Although almost every state requires drivers to carry liability insurance, the minimum coverage is not always enough to cover the cost of an accident. It’s always best to carry as much liability coverage as you can afford, especially if you have a high net worth.

If you don’t have many assets or think the risk is worth it, you might be comfortable with carrying only the minimum coverage. But no matter what, make sure you’re carrying enough insurance to comply with state law and avoid paying fines for driving uninsured.

Liability Limits on Auto Insurance

Liability limits on auto insurance are the maximum amount that your insurance company will pay for injuries and property damage in accidents that you cause. Liability limits are typically written as three numbers divided by slashes.

For example, Arizona’s liability coverage requirements are 50/30/10. That means drivers need to carry $50,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident, and $10,000 in property damage liability coverage overall.

Why You Need More Liability Insurance Than the State Minimum

Your insurance company will never pay for anything beyond the limits of your policy. Using the Arizona example, if you cause an accident that leads to $70,000 in medical bills for the other driver, you will have to pay for $40,000 if you are only carrying the minimum insurance required. And if you can’t afford to pay the full amount, the other driver can sue, and you can have your assets seized or wages garnished to cover the remainder.

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Is uninsured motorist coverage required in New Jersey?

No, uninsured motorist coverage is not required in New Jersey – it is optional. Drivers can choose to buy at least $15,000 in uninsured motorist bodily injury coverage per person (at least $30,000 per accident) as well as at least $5,000 in uninsured motorist property damage insurance per accident.

Additionally, drivers have the option to purchase at least $15,000 in underinsured motorist bodily injury coverage per person (at least $30,000 per accident), along with at least $5,000 in underinsured motorist property damage insurance per accident.… read full answer

Uninsured/underinsured motorist coverage helps pay for a car accident if the at-fault driver doesn’t have enough insurance. Normally, the at-fault driver’s liability insurance pays for any property damage or injuries they caused. But if the other driver doesn’t have enough coverage, it can be time-consuming and difficult to sue them for funds to cover any bills. That’s where uninsured/underinsured motorist insurance can help save drivers time and money.

Even though New Jersey does not require uninsured/underinsured motorist coverage, it’s still a wise investment if you can afford it. In New Jersey, it’s estimated that 15% of drivers don’t have car insurance. This gives you a 1 in 7 chance that the other driver won’t have insurance if you get into an accident. Car accidents in New Jersey can be extremely expensive, too. For example, fatal accidents in New Jersey have a total cost of $798 million each year.

Key Facts About Uninsured Motorist Coverage in New Jersey:

Minimum Uninsured Motorist Bodily Injury: at least $15,000 per person and at least $30,000 per accident

Minimum Uninsured Motorist Property Damage: at least $5,000 per accident

Minimum Underinsured Motorist Bodily Injury: at least $15,000 per person and at least $30,000 per accident

Minimum Underinsured Motorist Property Damage: at least $5,000 per accident

Uninsured Drivers on the Road: 15%

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Is personal injury protection required in New Jersey?

Yes, personal injury protection (PIP) is required in New Jersey. Drivers in New Jersey are required to have at least at least $15,000 of PIP coverage for medical expenses, plus additional categories of coverage for especially serious accidents.

Personal injury protection helps ensure that everyone on the road in New Jersey has some financial assistance for medical payments in the event of a collision. Drivers in all no-fault states are required to have it because they are restricted in terms of when they can sue another driver for compensation after an accident. That means PIP coverage is their first line of defense if they face hospital bills or a long recovery from an injury.… read full answer

PIP required?	Yes, PIP is required
Minimum PIP coverage	At least $15,000 of PIP coverage
Annual cost of insurance	$2,416
State accident laws	No-fault
National cost ranking (1=cheapest)	48

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