New Jersey Auto Insurance Laws, Minimums, Requirements

What mandatory auto insurance laws exist in the state of New Jersey?

• The state of New Jersey has a somewhat complicated auto insurance system. Auto insurance is mandatory in the state of New Jersey, but the coverage limits are not specific. All drivers must carry three types of mandatory coverages including liability, personal injury protection, and uninsured motorist coverage. The New Jersey Department of Banking and Insurance (DOBI) recommends that all motorists carry certain coverage amounts under a “basic minimum policy.” Please review the next section for details.
• All New Jersey Motorists must carry a New Jersey Insurance Identification Card for each vehicle covered under the insurance policy at all times. Failure to present a current card may result in fines.
• If you are caught driving without auto insurance in the state of New Jersey, in addition to risking economic loss by not having insurance protection, you risk fines, and suspension of your driver's license or registration. You may have to do community service and you can even go to jail. In the future, your car could be impounded if you are caught driving without coverage and insurance surcharges may apply as well.

What is the Minimum Liability Coverage (Bodily Injury amounts per person, per accident, and property damage amounts):

If you buy automobile insurance in New Jersey, your policy must include liability, personal injury protection, and uninsured motorist coverage. The state of New Jersey recommends a “basic minimum policy” as outlined below. You may also opt for a “standard policy” as well which offers additional coverage.

Basic Minimum Policy

$10,000 bodily injury liability coverage for all persons per accident,
$5,000 for property damage,
$15,000 personal injury protection per person per accident,
and
up to $250,000 for permanent or significant injury as defined in the policy

Standard Policy

$15,000 bodily injury liability coverage per person per accident,
$30,000 for all persons per accident,
$5,000 for property damage,
$250,000 personal injury protection per person per accident,
and
up to $250,000 for permanent or significant injury as defined in the policy regardless of selected limit

What are the Rental Car Insurance Requirements?

Auto insurance is mandatory in the state of New Jersey, even for rental cars. The coverage limits are not specific, but all drivers must carry three types of mandatory coverages including liability, personal injury protection, and uninsured motorist coverage. Most auto insurance policies cover rental cars, so it is important to check with your insurance agent to verify that you are covered. Most credit cards include auto insurance for rental cars as well. If your auto insurance or credit card does not cover insurance for rental cars, you must purchase the mandatory coverages from the car rental company. If you are caught driving any vehicle without insurance, in addition to risking economic loss by not having insurance protection, you risk fines, and suspension of your driver's license or registration. You may have to do community service and you can even go to jail. In the future, your car could be impounded if you are caught driving without coverage and insurance surcharges may apply as well.

What are the rules pertaining to Uninsured/Underinsured Motorist Coverage?

In the state of New Jersey, all drivers must carry three types of mandatory coverages including liability, personal injury protection, and uninsured motorist coverage. The coverage amounts for uninsured motorist coverage are not specific. An insurance agent will work with you to assess how much Uninsured/Underinsured Motorist Coverage you should carry based on your individual circumstances.

What are the rules pertaining to the exclusion from coverage of a driver living in household?

If you carry insurance in the state of New Jersey, auto insurance companies may exclude certain household members from coverage. You also have the option to exclude members of the household as well. If members of your household have access to or will be driving your vehicle, you should not exclude them from your policy. Any household exclusion would free the insurance company from the responsibility of paying a claim that includes an excluded member of your household.

What are the rules regarding whether a driver has prior insurance? That is, how does state law handle it if a driver has no prior insurance or has let their previous insurance lapse?

In the state of New Jersey, there is no grace period for paying your insurance. If you are late making a payment, your insurance lapses at 12:01 a.m. Once your insurance lapses, you are not covered. If you are caught driving without auto insurance in the state of New Jersey, in addition to risking economic loss by not having insurance protection, you risk fines, and suspension of your driver's license or registration. You may have to do community service and you can even go to jail. In the future, your car could be impounded if you are caught driving without coverage and insurance surcharges may apply as well.

Is the state a No Fault or Tort state? What does either mean to the policy owner?

The state of New Jersey has adopted a Choice No Fault system. what this means is, drivers have the option to reject No Fault system options and use the Tort System. Under the Tort System, drivers retain the right to sue for any and all auto related injuries.

What is the average auto insurance premium in this state? As of what year?

As of 2006, New Jersey resident’s average insurance premium was approximately $1,152, the 2nd most expensive in the nation. This down 2.8% from the previous year. The national average was $817.

Sources

Insurance Information Institute

State of New Jersey Department of Banking and Insurance