New Jersey Auto Insurance Requirements

The New Jersey State laws governing auto insurance are more complicated than other states. The state does not specifically set the amount of insurance you must carry but it does require specific types of coverage as well as setting recommended amounts of coverage. They strongly suggest that residents carry liability insurance, personal injury protection insurance and uninsured motorist coverage. The basic minimum liability insurance policy offers $15,000.00 of personal injury protection per person, $10,000.00 of coverage per accident, and $5,000.00 of property damage coverage. You will also be required to carry $250,000.00 for permanent or significant injury coverage. The standard policy carries $15,000.00 of bodily injury per person, $30,000.00 of bodily injury coverage per accident and $5,000.00 of property damage. The standard policy also carries 250,000.00 of PIP coverage per accident and $250,000.00 for permanent or significant injury coverage. You and your insurance agent will determine the amount of mandatory uninsured coverage you should carry.

The same rules concerning mandatory liability auto insurance are also required on rental vehicles by the state of New Jersey. Your personal auto insurance policy generally covers rental cars but if it does not provide coverage for rental vehicles, you may want to check with the credit card that you used to rent the car. Credit card companies sometimes cover insurance on rental cars. If neither option applies to your situation, you must purchase the minimum liability insurance from the rental company. This coverage will cost about $7.00 to $14.00 per day. Keep the rental agreement in the vehicle throughout the term of the agreement. This will be your proof of insurance in case of an accident or traffic stop. Failure to carry insurance will result in fines, loss of your license and the possible loss of your registration.

New Jersey is a Choice No Fault state. This means that New Jersey residents can choose to reject the no fault system and opt for the tort system. If they choose the tort system, they can be sued and sue for personal injuries and property damages. The individual held responsible for causing the accident will also be held responsible for all expenses connected to the accident. This includes medical injuries, loss of income, suffering, and damages to the property of other individuals involved in the accident.



New Jersey requires motorists to be covered by the mandatory liability auto insurance policy at all times. Should you become involved in an accident or be stopped for a traffic violation and you do not have the required liability policy, you will be cited as an uninsured motorist. Even if the accident is not your fault, you can still be cited for lacking proof of insurance. New Jersey treats the lack of proper insurance as fraud. This will result in fines up to $1,000.00 and the possibility of civil fines as high a $15,000.00, as well as loss of your driver’s license and registration. You may also receive a jail sentence or community service. The penalties will increase with repeat offenses. You could have your car impounded. The exemptions to the mandatory liability insurance are off highway vehicles and non operational vehicles. If your insurance lapses, you must replace it immediately. New Jersey does not have a grace period for replacing your insurance policy.



You must produce proof of insurance upon request by the authorities. The New Jersey Insurance Identification Card is your proof. This proof needs to include the name of the insurance company, the dates of coverage, and the amount of liability coverage. It also needs to include the policy number, VIN number of the vehicles covered, the make and model of the vehicles as well as the name of the policy holder. The auto insurance needs to be authorized by a qualified auto insurance company.

Remember that you may need your proof of minimum liability auto insurance at any time. You will definitely need in the case of involvement in an accident either as the cause of the accident or the victim of the accident, or if you should be stopped for a traffic violation.