Car Insurance Requirements in New Jersey (2025)

Car insurance requirements vary depending on where you drive. It’s important to understand what New Jersey law requires so you can have enough protection on the road and avoid penalties for driving while uninsured. New Jersey drivers can choose between basic and standard coverage limits. Your choice affects your right to sue after a car accident.

Here’s what you need to know about New Jersey’s “choice no-fault” system and coverage requirements.

New Jersey car insurance requirements

Though New Jersey drivers can select the state’s basic minimum-coverage policy, it has limited protections and doesn’t include bodily injury liability coverage. Most drivers in the Garden State opt to purchase a standard policy, which includes bodily injury liability, additional protections, and higher policy limits.

Below, you can compare the basic and standard coverage options in New Jersey. Drivers in the state must at least purchase the minimum coverage included in the basic policy.1

Property damage liability

Property damage liability protects you financially if you cause an accident that wrecks someone else’s property. Coverage can include harm done to another person’s vehicle and structures like fences, mailboxes, or lampposts.

New Jersey law requires you to have property damage liability protection. Your policy includes up to $5,000 per accident when you purchase basic coverage. If you opt for a standard policy, your policy limit can range from $25,000 per accident to $100,000 or more.

Personal injury protection (PIP)

To address medical costs, New Jersey requires all drivers to carry personal injury protection (PIP) coverage. It kicks in if you or anyone your policy covers faces injuries due to an auto accident. It pays for medical expenses even if you caused the crash, including the cost of treatment and reimbursement for lost wages.

You must have at least $15,000 per person or per accident in PIP coverage, whether you choose basic or standard coverage. The limit extends to $250,000 for certain injuries, including brain trauma, spinal cord damage, and other severe injuries. However, drivers with a standard policy can increase limits to $250,000 or more.

Bodily injury liability

Though PIP covers your medical bills, it doesn’t cover injuries you cause to others in a car accident. That’s why bodily injury liability is so important — it protects you against claims and lawsuits if you injure someone.

New Jersey’s basic policy doesn’t automatically include bodily injury liability, but you have the option to add $10,000 in coverage to the policy. If you select the standard policy, bodily injury liability starts at $25,000 per person and $50,000 per accident but can increase to as much as 10 times that if you want more extensive coverage.

Uninsured/underinsured motorist (UM/UIM)

New Jersey has the lowest rate of uninsured drivers in the country, at 3%, according to 2023 data from the National Association of Insurance Commissioners (NAIC).2 However, that statistic doesn’t include underinsured drivers. If another driver causes a car accident, their coverage might not sufficiently cover your damages. UM/UIM coverage can bridge the gap.

A basic policy doesn’t include UM/UIM coverage. If you choose a standard auto policy, you can buy UM/UIM coverage to match the limits you choose for your liability protection.

New Jersey Special Automobile Insurance Policy

Do you need more than state minimum coverage in New Jersey?

Liability-only insurance pays for the expenses of the other driver and their passengers after an accident, but it doesn’t cover your repair costs. Full coverage, which includes collision and comprehensive insurance, costs more but extends your protection to cover your vehicle in a range of scenarios.

On average, New Jersey drivers pay $161 per month for liability coverage and $225 for full-coverage insurance. The amount of coverage you choose also determines what claims the insurance company will cover and whether you have a limited right to sue after a crash.

The cost of liability-only car insurance in New Jersey

Liability is coverage that can pay for the other driver’s property damage and injuries if you cause an accident. Without this coverage, you’d face expensive out-of-pocket costs. How much you pay for minimum liability car insurance in New Jersey varies widely among insurers. CSAA has the cheapest average liability coverage, at $95 per month.

Compare the cheapest liability-only quotes for New Jersey drivers below.

The cost of full-coverage car insurance in New Jersey

Full-coverage insurance can protect your vehicle against accidents, thefts, and natural disasters. When looking at full-coverage options, you should remember that plans can vary and that your coverage should meet your financial situation and coverage needs.

Your full-coverage insurance premiums depend on the company and policy limits you choose. CSAA offers the most affordable average rate for full coverage, at $176 per month. 

Below, you can find average rates for full-coverage insurance from top insurers in New Jersey.

Penalties for driving without proof of insurance in New Jersey

Driving a car without insurance is a serious offense in New Jersey that can lead to fines, community service requirements, license suspension, jail time, and surcharges.4

• Fines: For the first offense, drivers face a fine of up to $1,000. The fine increases to $5,000 if caught a second time.

• Community service: The court determines community service requirements for a first offense, but a second offense comes with a mandatory 30-day community service period.

• License suspension: Drivers risk having their license suspended for one year if they don’t bring proof of insurance to the hearing. A second offense can result in a loss of driving privileges for two years.

• Jail time: A first offense doesn’t generally require jail time. But failing to have an auto insurance policy a second time can result in spending 14 days in jail.5

• Insurance surcharges: Besides the immediate fines and potential incarceration, uninsured drivers also face insurance surcharges of up to $250 per year.6

Optional car insurance coverages to consider

You can choose to have auto coverage beyond the New Jersey minimum requirements. Here are common optional coverages to consider: