If you are a New Jersey motorist, you may have heard your insurance agent speak about personal injury protection, also known as PIP insurance. Or, you may have seen it listed in your auto insurance policy documents, but never looked carefully at what this essential element of your policy is. So what is personal injury protection, and how does New Jersey PIP work? Bankrate’s insurance editorial team has a combined 47 years of industry experience and includes four licensed agents committed to dispelling the confusion around coverage. We break down New Jersey PIP laws so that you can choose the best option for your unique needs.

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What is PIP insurance?

New Jersey is one of the many U.S. states that are considered no-fault states. No-fault laws are put in place to help pay personal injury claims quickly following an accident. In a no-fault state, you have limited ability to sue the other driver, but your auto insurance extends coverage through your PIP insurance so that your claim is paid without having to wait for lengthy court cases to be resolved.

However, just because New Jersey is a PIP state does not mean fault from an accident is never determined. If the other driver is determined to be at fault, their liability limits could take care of your medical bills after fault is identified.

Nearly every state in the U.S. requires a minimum level of liability insurance in order to drive legally, and in New Jersey, these minimum limits are changing. Effective January 1, 2023 you are mandated by law to have at least the following minimum limits under a Standard Auto Insurance Policy to legally drive in the Garden State:

  • $25,000 bodily injury liability per person
  • $50,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $15,000 personal injury protection (PIP)
  • $25,000 uninsured motorist bodily injury per person
  • $50,000 uninsured motorist bodily injury per accident
  • $25,000 underinsured motorist bodily injury per person
  • $50,000 underinsured motorist bodily injury per accident

These minimum limits will increase once more on January 1, 2026. At that time, New Jerseyans will be required to carry liability limits of at least:

  • $35,000 bodily injury liability per person
  • $70,000 bodily injury liability per accident
  • $25,000 property damage liability per accident
  • $15,000 personal injury protection (PIP)
  • $35,000 uninsured motorist bodily injury per person
  • $70,000 uninsured motorist bodily injury per accident
  • $35,000 underinsured motorist bodily injury per person
  • $70,000 underinsured motorist bodily injury per accident

However, New Jersey also offers another option for minimum coverage through a Basic Auto Insurance Policy. Under a Basic Policy, minimum limits include:

  • $5,000 property damage liability per accident
  • $15,000 personal injury protection (PIP)

A Basic Policy also has bodily injury liability as an option, with a limit of $10,000 per accident. What is important to note is that the Basic Policy does not extend uninsured or underinsured motorist coverage, and optional comprehensive and collision coverage may only be available with some auto insurers.

You may have noticed that whether you carry a Standard Auto Insurance Policy or a Basic Policy in New Jersey, PIP is required.

How does New Jersey PIP work?

New Jersey PIP helps pay your medical costs and those of passengers in your vehicle up to your coverage limit, regardless of who is at fault in an accident. It may also pay for accident-related costs, such as lost wages, transportation to medical visits, funeral expenses and even essential services if you select this additional PIP coverage on your auto policy.

New Jersey also offers an option to leverage your personal health insurance coverage along with your PIP coverage, which might reduce your auto premium. However, it may be best to speak with a licensed insurance agent and contact your health insurer to understand if this option would provide you with sufficient coverage.

Is PIP required in New Jersey?

PIP is mandatory in New Jersey, regardless if you choose the Basic or Standard Auto Policy. You cannot legally drive on public roads without having PIP coverage as part of your policy. Your PIP is in addition to the other state minimum requirements.

However, keep in mind that NJ PIP has a few options to satisfy the state’s requirement. You can choose only to have medical PIP coverage, medical and additional PIP coverage, such as for lost wages and essential services, or even to leverage your personal health insurance along with your PIP coverage. It could be a good idea to speak with a licensed insurance agent to determine which PIP option you are most comfortable selecting. In addition, PIP has different coverage limits to choose from, ranging from the minimum $15,000 limit to as high as $250,000 coverage limit.

How much does PIP cost in New Jersey?

When you apply for auto insurance, your potential insurer will give you a car insurance quote. This quote is based on multiple factors, ranging from the age and make of your vehicle to the ZIP code in which you live, your driving history, marital status, age and credit rating. Thus, PIP insurance in New Jersey costs will vary greatly from person to person.

Other factors to take into consideration include your deductible amount  — a higher deductible generally means a lower premium — and the amount of PIP coverage you select.

Key things to note about PIP insurance in New Jersey

Although there are many different coverage levels that drivers can choose from, the basic ideas behind New Jersey PIP coverage are that:

  • It is mandatory for all drivers in New Jersey.
  • Its purpose is to pay for medical expenses or other costs for the driver or their passengers following an accident.
  • It is paid out regardless of who is at fault in the accident.
  • The minimum required limit is $15,000, but you can purchase up to $250,000 of PIP.
  • It is generally paid quickly; 30-60 days following an accident.

Frequently asked questions

    • You might want to contact your auto insurer as soon as you’re able to following an accident. A claims adjuster can help walk you through how to file a PIP claim, how your PIP coverage applies (depending on which coverage option you chose), what paperwork you will need to provide and what to expect as far as claim completion time. It’s also best to save your medical receipts and other documents related to your injuries in case you need to provide those to your insurer.
    • These coverage types are similar in that they both cover medical expenses following an accident. However, PIP generally offers more robust coverage as it can also help pay for lost wages and household needs (such as a cleaning service while recovering from injury). On the other hand, medical payments coverage usually only pays for medical costs.