Skip to Main Content

The New Jersey Assigned Risk Plan

Traffic On Road Against Cloudy Sky
Anthony Ellis / EyeEm/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . Our content is backed by, LLC, a licensed entity (NPN: 19966249). For more information, please see our

The rate of traffic accidents in New Jersey has been on the rise over the years. With more than 6 million drivers, it is not surprising that New Jersey had over 200,000 accidents in 2019. With such a high number of high-risk drivers in the state, and because minimum car insurance is mandatory in the Garden State, the New Jersey Assigned Risk Plan was developed to address both those concerns. Ultimately, this plan was designed to help high-risk motorists with poor credit remain insured.

New Jersey Personal Automobile Insurance Plan (NJ PAIP)

Finding affordable car insurance for high-risk drivers may be more nuanced in some states. And if your credit score is poor or if your driving history has a few negative marks, it is possible to be rejected by some insurance companies. This is why the New Jersey Assigned Risk Plan came into existence in 1992. Also known as the New Jersey Personal Automobile Insurance Plan (NJ PAIP), this government initiative is meant to provide motorists in the state with car insurance when they have been turned down by private insurers because of their credit score or driving history.

Bear in mind that the NJ PAIP is not an auto insurance agency. Rather, it is a program that matches drivers with insurance companies for adequate coverage, also called an “assigned risk plan.”

Who is eligible for the NJ PAIP?

As with most state-sponsored insurance programs, to qualify for the NJ Assigned Risk Plan, you first have to offer proof that you have failed to get regular insurance — at least twice in the span of 60 days. Only those who have been declined all other insurance options can apply for the NJ PAIP.

Other eligibility requirements include:

  • New Jersey resident and licensed driver
  • Vehicle registered in New Jersey
  • Suspended license for being uninsured
  • Necessity of insurance to have license reinstated

Your credit score does not have any significance in applying for PAIP (although it can be a contributing factor to your premiums in some cases), but certain factors can still make you ineligible, such as:

  • Invalid driver’s license
  • History of car insurance policy lapses or non-payment of premiums
  • Withholding information in the application

If you are turned down once by the PAIP, you are free to apply again if the ineligibility factors no longer exist.

What kind of coverage is available with the NJ PAIP?

Under the New Jersey Assigned Risk Plan, drivers may choose between a basic and a standard policy, with the former offering fewer coverage options than the latter. The basic policy does not include bodily injury in the minimum coverage but offers it as an add-on, up to $10,000 per accident. Property damage coverage of $5,000 per accident and personal injury protection of $15,000 per person per accident are also included in the basic plan. The base features of the standard policy include bodily injury coverage, property damage, personal injury protection, uninsured motorist coverage and collision and comprehensive coverages.

High-risk auto insurers associated with the New Jersey Assigned Risk Plan are obligated to provide coverage to drivers who qualify for three years. After that duration, if you are still a high-risk driver and fail to get regular insurance, you will likely be able to apply for PAIP again. Coverage options may differ from one insurance provider to another, however, so comparing available options will give you the best idea of what will suit your needs and budget.

How much does car insurance cost with the New Jersey Assigned Risk Plan?

High-risk car insurance is typically more expensive than the options in the general market and the NJ Assigned Risk Plan is consistent with that trend. Depending on the plan you select, you may need to increase coverage limits to satisfy the minimum requirements of the state. Your premium will also depend on the factors that individual insurance providers evaluate to set a price for you, which can include your ZIP code, age, type of vehicle and marital status, among other variables.

The NJ PAIP has two payment options: you can either pay the total annual premium in full at the start of your policy, or you can choose to pay a 30 percent deposit initially and the rest in installments over the next few months. If you are insured through this program, you are not bound to stay with it if you are eligible for a cheaper policy elsewhere. You are free to cancel the policy and your remaining premiums will be refunded. However, be sure your replacement policy is in force before terminating your NJ PAIP plan to avoid any lapse in coverage.

How to buy insurance from the NJ PAIP

For the most accurate quote, visit the official website of the NJ PAIP and complete the form. The information you provide will be used to determine the amount you can expect to pay for insurance and also be matched with a high-risk insurer, so it is important that you provide as many details as possible.

The company that the NJ PAIP assigns to you must commit to providing you with insurance for the next three years, regardless of your driving history. Unlike purchasing regular car insurance, your options are likely to be fairly limited when it comes to high-risk insurance providers, so the three year obligation can potentially be a huge benefit.

Alternatives to the NJ PAIP

New Jersey is a no-fault state and seeks to ensure low-cost insurance is available to help drivers from all walks of life remain insured. There are ways to get high-risk insurance without state-sponsored programs if you look in the right places. If you have an imperfect driving history or little to no credit, you have the following options in New Jersey besides the Assigned Risk Plan:

  • Special Automobile Insurance Policy (NJ SAIP): Another government program but meant for only those who are on Medicaid with hospitalization. Also called New Jersey Dollar a Day car insurance, it provides only medical coverage for emergency treatment after an accident.
  • High-risk insurance companies: It is possible to find insurers that accept high-risk drivers, although you may have to do your own research to find those with which you will be eligible for coverage, and the three year guaranteed coverage period would not necessarily apply. In New Jersey, insurers are not allowed to use credit scores to determine the premium. Most national insurers also have different coverage options for motorists with DUIs, accidents and other violations on their record.

The laws in New Jersey seek to give every motorist access to car insurance. By gradually improving your driving record, you may become eligible for various discounts offered by most insurers that can reduce annual premiums either up front or over time. Otherwise, you may be able to obtain insurance through state-supported initiatives.

Frequently asked questions

What is the best auto insurance company?

No single company can claim to be the best because insurance is highly personal and subjective. However, some of the best-known insurance companies in the market are the ones that offer the most winning combination of affordable prices, excellent customer service, discounts and coverage options.

How much insurance do I need in New Jersey?

The minimum required car insurance in New Jersey is bodily injury coverage of $15,000 per person and $30,000 per accident and property damage coverage of $5000. Drivers also need to carry $15,000 in personal injury protection, $15,000 in uninsured/underinsured motorist coverage for bodily injury and $5,000 for property damage.

How do I save on car insurance?

Choosing an affordable provider (that offers the coverage you need) and taking advantage of discounts are two of the most-recommended ways to save on insurance premiums. Most insurers offer some of the basic discounts for good driving habits, owning your home, bundling policies, having a safe vehicle and being a loyal customer. However, if high-risk drivers should contact providers directly to get a better idea of which discounts they may actually qualify for.

Written by
Cynthia Widmayer
Insurance Contributor
Cynthia Widmayer is an insurance contributor for Bankrate and has over two years of experience as a personal finance writer. She covers home, car and life insurance products for Bankrate, The Simple Dollar and among others.