New Jersey Car Insurance: Updated Laws Explained

Table of Contents

1. Introduction
2. New Jersey's Increased Minimum Liability Limits
3. Personal Injury Protection Limits
4. New Jersey's Car Insurance Options
   1. Dollar a Day Insurance
   2. Basic Policy
   3. Standard Policy
   4. Full Coverage Car Insurance
5. The Best Option for Most New Jersey Drivers
6. How to Find the Best Car Insurance Policy for You
7. Conclusion

New Jersey Car Insurance Requirements: What You Need to Know

If you're a driver in New Jersey, it's essential that you have the proper car insurance coverage. Not only is it a legal requirement, but it also protects you financially in the event of an accident. However, the process of finding the right car insurance can be overwhelming, especially with recent changes to the law that increased the minimum liability limits for all New Jersey drivers.

In this article, we'll take a closer look at New Jersey's car insurance requirements and the different coverage options available, so you can make an informed decision about which policy is right for you.

New Jersey's Increased Minimum Liability Limits

As of 2023, all New Jersey drivers will need to purchase at least $25,000 of bodily injury coverage per person, $50,000 per accident, and $25,000 of property damage liability coverage. These new limits, which are sometimes written as 25/50/25, are considerably higher than the previous limits of 15/30/5.

Personal Injury Protection Limits

New Jersey's personal injury protection (PIP) limits are still the same, at $15,000 per person, per accident, and that coverage is mandatory. However, unlike most states which have just one level of coverage that everyone has to meet, New Jersey offers drivers the option to buy a little less coverage at a much lower price.

New Jersey's Car Insurance Options

Dollar a Day Insurance

The lowest level of car insurance coverage you can get in New Jersey is called dollar a day insurance, which as the name implies, costs just $1 a day. But it provides almost no coverage and is only available to drivers on federal Medicaid with hospitalization benefits. Buying dollar a day insurance is basically like driving without insurance and it's not worth the risk.

Basic Policy

One step up from dollar a day insurance is New Jersey's basic policy. This policy only includes $5,000 per accident of property damage liability and $15,000 per person per accident of personal injury protection. The basic policy also includes a limited right to sue. In other words, if you decide not to purchase any bodily injury liability coverage, you're agreeing not to sue other drivers if you're injured in an accident. Another drawback of the basic policy is that you may not be able to add collision or comprehensive insurance to it, meaning that you'll have no coverage for your own vehicle.

Standard Policy

The "standard policy" is the standard minimum coverage level that we talked about earlier: $25,000 of bodily injury per person, $50,000 per accident, and $25,000 of property damage liability. The standard policy also has the option to add uninsured motorist coverage to match your liability limits, and there's no limit on your right to sue. If you're trying to buy minimum coverage in New Jersey, a standard policy is basically the lowest level of coverage you can get responsibly.

Full Coverage Car Insurance

But even the standard policy is missing two crucial types of coverage that most drivers need: collision and comprehensive. That's why the fourth level of coverage, full coverage car insurance, is the best option for most New Jersey drivers. If your car's damaged in an accident, totaled in a winter storm, stolen, or vandalized, full coverage car insurance can help you avoid astronomical out-of-pocket costs. If you have a car loan or a lease, your lender will require full coverage, and even if you own your vehicle outright, it's a worthwhile investment if you drive regularly and depend on your car.

The Best Option for Most New Jersey Drivers

While full coverage car insurance may be the best option for most New Jersey drivers, the right policy for you will depend on a variety of factors such as your budget, driving habits, and level of risk tolerance. It's important to get multiple quotes and compare coverage options before making a decision.

How to Find the Best Car Insurance Policy for You

One way to find the best car insurance policy for your needs is by using a comparison site like Jerry. Jerry compares dozens of quotes at a time to help connect drivers with the best policies, coverage, and rates for their budget.

Conclusion

By understanding the different types of car insurance coverage available to you as a driver in New Jersey, you can make an informed decision about the level of protection you need. While the recent changes to the state's minimum liability limits may make finding cheap car insurance a little harder, it's still possible to get the coverage you need at a price you can afford by comparing quotes and shopping around.