New Jersey Auto Insurance Requirements: 35/70/25 Since 2026

Quick Answer: New Jersey Minimum Auto Insurance

New Jersey requires all drivers to carry liability insurance. The state-mandated minimums are:

New Jersey is unique—it offers two types of auto insurance policies: Basic (dollar-a-day) and Standard. Most drivers hold the Standard policy, whose liability floor is now 35/70/25.

The Standard minimums moved twice in three years. P.L.2022, c.87 raised them in two phases: to 25/50/25 for policies issued or renewed on or after 1 January 2023, and to 35/70/25 for policies issued or renewed on or after 1 January 2026. The old 15/30/5 figures, unchanged since the 1970s, no longer satisfy the law — and a great many guides still quote them.

The Basic policy was deliberately left out of both increases. The Act's own text excludes the basic automobile insurance policy under N.J.S.A. 39:6A-3.1, so New Jersey's true legal floor is still a $5,000 property-damage policy with no required bodily-injury coverage at all. That gap between the two policy types is now roughly seven times wider than it was in 2022.

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What New Jersey Law Actually Requires

Under New Jersey law (N.J.S.A. 39:6A-3), all drivers must:

1. Maintain auto insurance meeting state requirements
2. Carry proof of insurance at all times while driving
3. Choose between Basic or Standard policy
4. Maintain PIP coverage (required in both policy types)

Understanding New Jersey's Two-Tier System

Standard Policy (Most Common)

Most drivers carry Standard coverage:

• Bodily Injury Liability: $35,000 per person / $70,000 per accident
• Property Damage Liability: $25,000
• Personal Injury Protection (PIP): $15,000 minimum
• Uninsured/Underinsured Motorist: must be offered at limits matching the new liability minimums

Insurers were required to move existing policies up automatically. Under the Act, a carrier renewing a policy written at limits that no longer meet the minimum must notify the named insured that the limits have been increased, and — unusually — does not need a signed coverage selection form to do it.

Basic Policy ("Dollar-a-Day")

Limited coverage for low-income drivers:

• Property Damage Only: $5,000
• PIP: $15,000
• NO bodily injury coverage for injuries you cause to others
• Costs approximately $365/year (hence "dollar-a-day")

Important: Basic policies provide minimal protection and are only available to qualified low-income drivers.

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New Jersey No-Fault Insurance Explained

New Jersey is a no-fault state with a unique twist:

How No-Fault Works in NJ

Personal Injury Protection (PIP) is mandatory and covers:

• Your medical expenses (up to policy limit)
• Lost wages
• Essential services
• Funeral expenses

Verbal Threshold vs. Lawsuit Option

When you buy insurance in NJ, you choose:

1. Limitation on Lawsuit Option (Verbal Threshold)

• Lower premiums
• You can only sue at-fault drivers for serious injuries:
  • Death
  • Dismemberment
  • Significant disfigurement
  • Significant scarring
  • Displaced fractures
  • Loss of a fetus
  • Permanent injury
• Cannot sue for "minor" injuries or pain and suffering

2. Unlimited Right to Sue

• Higher premiums (15-40% more expensive)
• Can sue at-fault drivers for any injury, including minor ones
• Can seek compensation for pain and suffering

Most drivers choose the Verbal Threshold to save money, but it limits your legal options.

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Minimum Coverage Requirements Breakdown

Bodily Injury Liability - $35,000/$70,000 (Standard Policy)

Covers injuries you cause to other people:

• $35,000 maximum per injured person
• $70,000 maximum per accident
• Pays medical bills, lost wages, pain and suffering
• Does NOT cover your own injuries (PIP covers you)

Property Damage Liability - $25,000 (Standard Policy)

Covers damage you cause to others' property:

• Other vehicles
• Buildings, fences, guardrails
• Personal property in other vehicles
• Does NOT cover your own vehicle

The Basic policy is the exception. Its property-damage limit stayed at $5,000 through both phases of the increase, because P.L.2022, c.87 does not apply to it. A Basic-policy holder who hits a $48,000 vehicle is personally exposed for the remaining $43,000.

Personal Injury Protection (PIP) - $15,000

Covers your medical expenses regardless of fault:

• Medical bills
• Lost wages (up to $100/week for 52 weeks)
• Essential services (childcare, housekeeping)
• Funeral expenses

PIP deductible options:

• $0 (no deductible)
• $250
• $500
• $1,000
• $2,500

Higher deductibles = lower premiums.

Uninsured Motorist Coverage (UM/UIM)

Required on Standard policies, at limits no lower than the liability minimums — which means the 2026 increase pulled UM/UIM up with it:

• Protects you when hit by uninsured drivers
• Protects you when hit by hit-and-run drivers
• Covers underinsured drivers (those with insufficient coverage)
• Can be rejected in writing, but not recommended

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Penalties for Driving Uninsured in New Jersey

New Jersey has strict penalties for uninsured driving:

First Offense

Second Offense

Additional Consequences

• SR-22 requirement: Must file SR-22 for 3 years after reinstatement
• Vehicle impoundment: Police can impound uninsured vehicles
• Higher insurance rates: Expect 30-100% rate increases
• Personal liability: Fully responsible for damages if you cause an accident

New Jersey takes uninsured driving very seriously—penalties are among the strictest in the nation.

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Recommended Coverage for New Jersey Drivers

New Jersey's minimums are inadequate for most accidents:

Minimum Recommended: 50/100/50

Better Protection: 100/300/100

Optional But Recommended Coverages

Increased PIP

• Raise from $15,000 to $50,000 or $250,000
• Medical costs in NJ are high
• Relatively inexpensive upgrade

Medical Expense Benefits

• Secondary coverage after PIP exhausted
• Covers family members
• Typically $1,000-$10,000

Collision Coverage

• Pays to repair your car after accidents
• Required if you have a loan/lease
• Subject to deductible ($250-$1,000)

Comprehensive Coverage

• Covers theft, vandalism, weather, animals
• Required if you have a loan/lease
• Subject to deductible

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New Jersey-Specific Insurance Rules

Special Automobile Insurance Policy (SAIP)

New Jersey offers ultra-low-cost coverage for eligible low-income drivers:

Eligibility:

• Medicaid recipient, OR
• Income under $30,000 (single) or $45,000 (family), AND
• Age 65+ or receiving Social Security disability

Coverage provided:

• Property Damage: $10,000
• PIP: $75,000
• No bodily injury liability

Cost: Approximately $365/year

Electronic Insurance Verification

New Jersey uses an advanced verification system:

• Insurers report coverage electronically to MVC
• Random verification checks at toll plazas
• Instant verification during traffic stops
• Registration renewal requires active insurance

Named Driver Exclusion

New Jersey allows you to exclude specific drivers from your policy:

• Must be in writing
• Excluded driver CANNOT drive your vehicle
• If they do, NO coverage applies
• Reduces premiums if excluding high-risk drivers
• Commonly used for household members with DUIs

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How Much Does New Jersey Auto Insurance Cost?

New Jersey has some of the highest auto insurance rates in the nation:

Why NJ insurance is expensive:

• Dense population and heavy traffic
• High medical costs
• Frequent insurance fraud
• No-fault system increases costs
• Lawsuit-friendly environment

Factors affecting your rate:

• Age and driving experience
• Location (Newark vs. rural Sussex County)
• Driving record
• Credit score
• Vehicle type
• Annual mileage
• Coverage levels chosen

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Frequently Asked Questions

Is car insurance required in New Jersey?

Yes. All drivers must carry minimum auto insurance. The Standard policy requires 35/70/25 liability plus $15,000 PIP and UM coverage, for policies issued or renewed on or after 1 January 2026. Qualified low-income drivers may use Basic or SAIP policies, which were not affected by the increase.

Should I choose verbal threshold or unlimited right to sue?

Most drivers choose verbal threshold to save 15-40% on premiums. Choose unlimited right to sue if you want the ability to sue for any injury, including minor ones. Consider your risk tolerance and budget.

Can I drive in New Jersey with out-of-state insurance?

Yes, if you're visiting. However, if you become a New Jersey resident or register your vehicle in NJ, you must obtain New Jersey insurance within 60 days.

What happens if I'm hit by an uninsured driver in New Jersey?

Your UM/UIM coverage pays for your injuries up to your policy limits. Your PIP covers your medical bills regardless. You can sue the uninsured driver personally, but collecting may be difficult.

Does New Jersey require SR-22 insurance?

NJ doesn't use SR-22 forms. Instead, insurers file electronic proof directly with the MVC for high-risk drivers. This happens automatically after DUI, uninsured violations, or excessive points.

Can I get insurance with a bad driving record in New Jersey?

Yes, but expect high rates. Options include:

• Non-standard insurers (higher rates)
• New Jersey Personal Automobile Insurance Plan (NJAIP) - assigned risk pool
• Shopping extensively—rates vary significantly

What is the New Jersey Personal Automobile Insurance Plan?

NJAIP is the state's assigned risk pool for drivers who can't get coverage in the standard market. It's expensive (often 2-3x normal rates) but guarantees coverage. You're automatically assigned to an insurer.

How does the Basic Policy work?

The Basic Policy provides minimal coverage (property damage and PIP only) for about $365/year. It's designed for low-income drivers. You're personally liable for bodily injuries you cause to others—there's no liability coverage.

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Key Takeaways

• New Jersey requires 35/70/25 liability plus $15,000 PIP and UM coverage on the Standard policy, for policies issued or renewed on or after 1 January 2026
• The Basic policy was excluded from the increase — it still carries $5,000 property damage and no required bodily-injury liability
• No-fault state with mandatory PIP coverage for your medical expenses
• Choose between Verbal Threshold (lower cost) or Unlimited Right to Sue (more protection)
• Penalties are severe - first offense includes $300-$1,000 fine and 1-year suspension
• State minimums are inadequate - recommend at least 50/100/50
• Uninsured motorist coverage is required but can be rejected in writing
• Low-income options include Basic Policy and SAIP for qualified drivers
• NJ insurance is expensive - among the highest rates in the nation

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Important Disclaimer

This guide provides general information about New Jersey auto insurance requirements based on publicly available sources. This is not legal or insurance advice. Requirements and laws can change. Always verify current requirements with the New Jersey Motor Vehicle Commission and Department of Banking and Insurance.

Consult with a licensed insurance professional for advice specific to your situation.

Last verified: 2026-09

Sources: New Jersey Department of Banking and Insurance Bulletin No. 25-06 (Auto Insurance Coverage Limits Pursuant to P.L.2022, c.87), N.J.S.A. 39:6B-1, N.J.S.A. 39:6A-3.1, New Jersey Motor Vehicle Commission