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As is true in most states, New Jersey drivers are required by law to purchase a minimum amount of car insurance to drive legally on public roads. Without this coverage, you may incur penalties, including fines, jail time and license suspension. To help New Jersey drivers find the best possible insurance for their needs, Bankrate’s insurance editorial team took a close look at insurance laws in the Garden State and how they impact drivers.
New Jersey car insurance laws
New Jersey’s car insurance laws give drivers two options for coverage: a basic policy or a standard policy. Basic policies were designed by the state to ensure all drivers can afford some level of auto insurance at an affordable rate. Not only does a basic policy have lower limits, but it also restricts your ability to buy certain coverage types like uninsured and underinsured motorist coverage. You may not be able to buy comprehensive or collision coverage either, depending on the company you choose.
Most insurance experts recommend purchasing a standard policy with more coverage types and higher limits if you can afford to do so. If you cause an accident with a basic policy, you will be responsible for liability costs beyond your coverage limits as well as any costs to repair damage to your own vehicle.
Laws passed in 2023 upgraded the limits for the state’s standard policies. Currently, the minimums stand at 25/50/25, which means:
- $25,000 in bodily injury liability per person per accident
- $50,000 in bodily injury liability total per accident
- $25,000 in property damage liability per accident
Drivers also need to have $15,000 in personal injury protection (PIP) and 25/50 in uninsured/underinsured motorist coverage. In 2026, the limits will again increase to 35/70/25 with 35/70 in uninsured motorist coverage. PIP will remain steady at $15,000.
Penalties for driving without insurance in New Jersey
If you are caught driving without insurance in New Jersey, you could be facing several penalties, depending on the specifics of your situation. The table below summarizes the penalties for driving without insurance in New Jersey:
|$300 to $1,000
|Up to $5,000
|Up to one year
|NJ MVC surcharge
|$100 for license reinstatement
|$100 for license reinstatement
|To be determined by the court
The severity of the consequences depends on how many times you’ve been caught driving without insurance. Additionally, if you cause an accident without insurance, you could be facing the penalties outlined above on top of having to pay out of pocket for the damages you caused.
You may also be required to obtain an SR-22 certificate, especially if your incident included other risky behaviors like drinking and driving or reckless driving. An SR-22 is a form that an insurance company files with the state to prove that you have the minimum required coverage. To obtain one, you’ll need to find a company that insures high-risk drivers in New Jersey and ask for the form to be filed on your behalf. You’ll have to do this before you are eligible to reinstate your license.
Not all carriers will insure high-risk drivers, and you’ll likely face a higher premium due to the driving behavior that caused the need for an SR-22. The best way to avoid these expensive policies is to practice safe driving and always carrying the proper insurance on your vehicle.
Getting into an accident without insurance in New Jersey
Getting into an accident without car insurance in New Jersey is a serious infraction. Not only will you likely be subject to fines, community service, license suspension and potential jail time, but you will also be financially responsible for the damages you caused. Without insurance, you’ll have to pay out of pocket. Depending on the severity of the accident, this could be a huge financial setback.
New Jersey’s “No Pay, No Play” law
New Jersey is one of several states that has a No Pay, No Play law. These laws are designed to help reduce the stress on insurance companies in terms of paying claims for drivers who don’t carry insurance. Essentially, if you are driving without insurance in New Jersey and someone hits you, you will not be able to collect any claim payout for noneconomic damages, including pain and suffering or mental anguish. Uninsured drivers in New Jersey are also unable to sue for compensation for personal injury and may be limited in their ability to collect for property damage.
Uninsured drivers who get hit by an insured driver and sustain serious injuries may be able to file a claim with their health insurance company to get reimbursed for their medical bills. Having a car insurance policy not only protects you from driving without insurance penalties, it also protects your finances from the fallout of at-fault losses and entitles you to greater compensation if you are not at fault for an accident.
Frequently asked questions
The best car insurance in New Jersey is different for every driver. It depends on a number of factors, like your budget, what discounts you can take advantage of, what type of coverage you need and how much coverage you need. New Jersey drivers should shop around and compare providers to figure out which car insurance company is best for their unique needs.
The average cost of car insurance in the Garden State is $2,547 for full coverage, which includes collision and comprehensive insurance, and $1,028 for state-mandated minimum coverage on a standard policy. For comparison’s sake, the national averages are $2,542 for full and $740 for minimum insurance. Keep in mind that your own rate is likely to differ from the averages, since it is based on a number of factors that are unique to you and your situation, such as your credit rating, age and driving record, as well as your car’s age, make and model. Shopping around for the most affordable coverage and seeking out discounts are two ways you may be able to save money on your car insurance.
No-fault insurance in New Jersey, also called personal injury protection (PIP), is a required coverage. It covers your medical bills, lost wages and costs related to pain and suffering if you are involved in an accident, regardless of which driver caused the crash. Keep in mind, though, that uninsured drivers in New Jersey are subject to the No Pay, No Play law, which limits their ability to be compensated after a not-at-fault loss.
It depends. Generally, car insurance follows the car, not the driver, which means that if you’re driving a borrowed car, the owner’s insurance policy should take care of any damages that you cause. Before you borrow a vehicle, make sure the owner has insurance and check whether there are any exclusions, like with a named driver policy. However, your own insurance policy could kick in secondarily if the limits on the owner’s policy are expended. If you have a car and a car insurance policy of your own, be sure to carry limits that you feel comfortable with.