New Jersey Car Insurance Requirements: Minimums, Fault Rules & Penalties

New Jersey auto insurance law is structured differently from most other states. The state offers two distinct policy tiers with different rights and minimum coverages, operates a choice no-fault system for medical expenses, and enforces mandatory insurance requirements with some of the steepest penalties in the region. Selecting the right policy type from the outset is essential.

Minimum liability requirements

New Jersey law defines two compliant policy options:

Standard policy

Coverage	Minimum limit
Bodily injury per person	$15,000
Bodily injury per accident	$30,000
Property damage per accident	$5,000
Personal injury protection (PIP)	$15,000 per person
Uninsured motorist (UM)	Required at matching BI limits

Basic policy

Coverage	Minimum limit
Property damage per accident	$5,000
Personal injury protection (PIP)	$15,000 per person
Bodily injury liability	Not included by default

Both policy types satisfy the state's coverage mandate, but they are not equivalent. The Basic policy provides no bodily injury liability unless the driver pays to add it. A Basic policyholder who injures someone in an accident has no BI coverage to draw on, leaving them personally exposed to the injured party's damages. Most drivers are better served by the Standard policy despite its higher premium.

Higher Standard policy limits — above 15/30/5 — are available and strongly recommended. The state minimums are among the lowest in the country and are unlikely to be sufficient in a multi-person accident.

Fault system

New Jersey is a choice no-fault state. Personal injury protection (PIP) is mandatory on both policy types and pays your medical expenses and those of your passengers after an accident, regardless of who caused it, up to the PIP limit.

Standard policyholders select their tort rights when they purchase the policy:

• Unlimited right to sue: You retain full rights to sue the at-fault driver for pain and suffering, economic losses, and damages that exceed your PIP benefits, regardless of injury severity.
• Limited right to sue (verbal threshold): Your right to pursue a tort claim for pain and suffering is restricted to cases involving defined serious injuries such as permanent injury, significant disfigurement, or loss of a body part. Premiums are typically lower under this option.

Basic policyholders receive limited tort rights automatically and cannot switch to unlimited without moving to a Standard policy.

Property damage claims are handled on an at-fault basis. Liability coverage from the responsible driver's policy applies to vehicle repair and other property losses.

High-risk coverage: the NJAIP

New Jersey does not use SR-22 certificates. Drivers who are unable to obtain coverage through the standard insurance market — typically due to serious violations or a poor driving record — are assigned to the New Jersey Personal Automobile Insurance Plan (NJAIP), the state's assigned-risk pool. NJAIP coverage satisfies the legal requirement, though premiums are generally higher than in the voluntary market. As a driver's record improves, they may become eligible to return to standard market carriers and reduce their costs.

Penalties for driving without insurance

Offense	Fine	License suspension	Additional consequences
First offense	$300–$1,000	1 year	Mandatory community service
Second offense	$5,000	2 years	Possible imprisonment

New Jersey's penalties for uninsured driving are among the most severe in the country. Even a first offense triggers both a fine and a one-year license suspension, along with mandatory community service. A second offense may result in imprisonment in addition to the fine and extended suspension. Reinstatement requires proof of current insurance and payment of all applicable fees. The cost of carrying a compliant policy is substantially lower than the cost of a single uninsured-driving conviction.

For coverage that meets New Jersey's Standard policy requirements, request a quote through AIS.