New Jersey auto insurance laws
Here are a few auto insurance laws all New Jersey drivers need to be aware of:
New Jersey is a no-fault state
New Jersey is one of the country's few no-fault states. This means that in the event of an accident involving injuries, all drivers bill their own insurance, regardless of who was at fault. This is different from at-fault states where the driver who caused the accident must pay for the hospital bills for all parties involved.
Consequences for driving without insurance in New Jersey
New Jersey drivers who skip the state's minimum coverage could face the following penalties:
- Fines
- Community service
- License suspension
- Insurance surcharges
What is the minimum car insurance required in New Jersey?
New Jersey has an unusual approach to minimum car insurance coverage. Drivers may either opt for basic coverage or standard coverage.
Basic coverage
This coverage includes:
- $5,000 of property damage liability coverage
- $15,000 of personal injury protection (PIP) with coverage up to $250,000 for certain injuries
However, this policy also gives drivers limited rights to sue for damages in severe accidents.
Standard coverage
The standard coverage option is closer to what most of the rest of the country requires. Drivers who go this route must have at least:
- $25,000 of bodily injury liability coverage per person
- $50,000 of bodily injury liability coverage per accident
- $25,000 of property damage liability coverage per accident
- $15,000 of personal injury protection (PIP)
The standard policy option gives drivers the right to choose between an unlimited right to sue for pain and suffering and a limited right to sue.
Other things to consider when looking for car insurance in New Jersey
Here are a few other things New Jersey drivers should keep in mind when shopping for car insurance:
New Jersey has the lowest rate of uninsured drivers
Perhaps due to the state's flexible coverage options, only 3.1% of its drivers lack insurance. But as the coverage requirements outlined above show, it's possible to have insurance and still come up short in a severe accident. Drivers who want to be well-protected should purchase higher limits if they're able to.
State minimum coverage doesn't protect the policyholder's vehicle
New Jersey minimum auto insurance pays for damages to other people's property and the policyholder's medical care. But it doesn't cover repairs to the policyholder's vehicle following a crash. Those who want help with these bills will find what they need with collision and comprehensive coverage.
How to find the best car insurance in New Jersey
Here are a few things New Jersey drivers can do to keep their costs manageable:
- Shop around: All providers charge unique rates to a driver based on their own risk assessment formulas. Comparing rates is the best way to find out which offers the most favorable rate for a specific person.
- Watch out for discounts: Drivers with unique situations, like those who own hybrid vehicles, could find big savings by seeking out insurers who offer car insurance discounts for these things.
- Raise the deductible: A higher auto insurance deductible reduces monthly premiums. But drivers who do this may feel safer saving for the deductible in an emergency fund so they aren't caught off guard in the event of an accident.