New Jersey car insurance laws require bodily injury liability coverage of $15,000 per person and $30,000 per accident, as well as $5,000 of property damage liabilitycoverage. State law also requires $15,000 of personal injury protection coverage.
The first two categories - bodily injury liability and property damage liability - cover injuries or damages that you accidentally cause with your car. Your car insurance pays up to a specified limit for each category. If you want additional coverage, you can choose higher limits than the ones required by New Jersey law. The last category, personal injury protection (PIP), handles your medical bills even if you cause a car accident. PIP pays for medical bills and any lost wages or assistance with home tasks that you can’t manage due to an accident-related injury.
As insurance is required by New Jersey law, you can face multiple penalties if you’re caught driving without it, including fines, suspension of license and registration, and high-risk insurance requirements.
NJ’s “Choice” No-Fault Laws:
New Jersey uses the no-fault system by default, but is one of three "choice” no-fault states. This means the state allows residents to choose whether they want to take part in the traditional no-fault system or opt for a tort system, like you’d find in most other states. The traditional no-fault system limits accident-related lawsuits, which means that each driver is initially responsible for their own medical bills – regardless of who caused the accident.
In New Jersey, however, residents can choose to sue or be sued after a car accident by opting out of the no-fault system. This means that drivers can file a lawsuit after an accident in order to recover damages solely from the person who caused the crash. But those who select this option typically pay higher insurance premiums, and they open themselves up to be sued if they cause a crash.
Another important New Jersey car insurance law to note is the grace period for new residents: You have 60 days to register your car when you move to New Jersey. You’ll need to bring proof of New Jersey car insurance when you go to register, with at least the following coverage types and amounts.
Minimum Coverage Required by New Jersey Car Insurance Laws
- Property damage liability: $5,000
- Personal injury protection coverage: $15,000
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.