New Jersey Auto Insurance Requirements 2025 | No-Fault Guide

New Jersey requires 15/30/5 liability plus $15,000 PIP and mandatory UM coverage. Learn the state's no-fault rules, Basic vs. Standard policy options, and why minimums aren't enough.

Quick Answer: New Jersey Minimum Auto Insurance

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

Coverage Type	Basic Policy	Standard Policy
Bodily Injury per Person	Not required	$15,000
Bodily Injury per Accident	Not required	$30,000
Property Damage	$5,000	$5,000
PIP (Personal Injury Protection)	$15,000	$15,000

New Jersey is unique—it offers two types of auto insurance policies: Basic (dollar-a-day) and Standard. Most drivers need Standard coverage (15/30/5 plus PIP).

What New Jersey Law Actually Requires

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

Maintain auto insurance meeting state requirements
Carry proof of insurance at all times while driving
Choose between Basic or Standard policy
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: $15,000 per person / $30,000 per accident
Property Damage Liability: $5,000
Personal Injury Protection (PIP): $15,000 minimum
Uninsured Motorist: $15,000/$30,000 (required)

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.

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.

Minimum Coverage Requirements Breakdown

Bodily Injury Liability - $15,000/$30,000 (Standard Policy)

Covers injuries you cause to other people:

$15,000 maximum per injured person
$30,000 maximum per accident
Pays medical bills, lost wages, pain and suffering
Does NOT cover your own injuries (PIP covers you)

Property Damage Liability - $5,000

Covers damage you cause to others' property:

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

Warning: $5,000 property damage is dangerously low—the average new car costs $48,000.

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 with same limits as bodily injury:

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

Penalties for Driving Uninsured in New Jersey

New Jersey has strict penalties for uninsured driving:

First Offense

Penalty	Amount/Details
Fine	$300 - $1,000
Community service	Up to 30 days
License suspension	1 year
Registration suspension	Until insured
Surcharge	$250/year for 3 years

Second Offense

Penalty	Amount/Details
Fine	$5,000
License suspension	2 years
Registration suspension	Until insured
Surcharge	$250/year for 3 years
Possible jail time	Up to 14 days

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.

Recommended Coverage for New Jersey Drivers

New Jersey's minimums are inadequate for most accidents:

Minimum Recommended: 50/100/50

Coverage	Amount	Annual Cost Increase
Bodily Injury	$50,000 / $100,000	+$50-100
Property Damage	$50,000	+$30-50
PIP	$15,000 (minimum)	Included
UM/UIM	Match BI limits	+$40-80

Better Protection: 100/300/100

Coverage	Amount	Why
Bodily Injury	$100,000 / $300,000	Covers serious injuries
Property Damage	$100,000	Covers luxury vehicles
PIP	$50,000	Better medical coverage
UM/UIM	$100,000 / $300,000	Matches BI coverage

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

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

How Much Does New Jersey Auto Insurance Cost?

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

Coverage Level	Average Annual Cost
Basic Policy	$365 - $500
State minimum (15/30/5)	$1,400 - $2,200
Standard (50/100/50)	$1,800 - $2,800
Full coverage	$2,400 - $4,000

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

Frequently Asked Questions

Is car insurance required in New Jersey?

Yes. All drivers must carry minimum auto insurance. Standard policy requires 15/30/5 liability plus $15,000 PIP and UM coverage. Qualified low-income drivers may use Basic or SAIP policies.

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.

Key Takeaways

New Jersey requires 15/30/5 liability plus $15,000 PIP and UM coverage (Standard policy)
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

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: December 2025

Sources: New Jersey Motor Vehicle Commission (MVC), New Jersey Department of Banking and Insurance, N.J.S.A. 39:6A