New Jersey Auto Insurance Laws
Auto Insurance Laws and Trends in N.J.
New Jersey has the 2nd highest auto insurance rates in the country, averaging $1,152 per year, compared to the national average of $817 per year. This can partly be attributed to the fact that New Jersey has a choice no-fault insurance system. Under this system, drivers can choose if they want to purchase an insurance policy under the tort system or the no-fault system. The difference between the two is as follows:
- Tort: The party who is deemed to be at fault in an accident is responsible for paying all injuries and property damage sustained. The injured party has the right to seek compensation for pain and suffering as well.
- No-fault: All insurance companies involved pay for any injuries sustained, up to a specified limit. If injuries and medical expenses exceed this limit, the victim can then seek compensation for the additional amount. They cannot sue for pain and suffering.
Minimum auto insurance requirements in New Jersey
As a driver in New Jersey, you'll be required to carry minimum amounts of auto insurance coverage. The minimum liability limits are:
- Bodily injury: $15,000 per person and $30,000 per accident
- Property damage: $5,000 per accident
- Personal Injury Protection (PIP): $250,000
Some individuals cannot afford to purchase an auto insurance policy, and therefore, will opt to drive uninsured. If they are involved in an accident, any expenses incurred will be paid out of pocket. They will also be subject to fines, suspension of driving privileges, and re-instatement fees.
Special New Jersey programs for auto insurance
The state of New Jersey offers drivers with financial hardships a special auto insurance policy that will cover any emergency medical expenses up to $250,000 and a death benefit up to $100,000. This policy does not cover physical damages to the driver's vehicle, nor does it cover damages to another party's vehicle. It is designed to reduce the number of uninsured drivers on the road. This special policy costs $360 if paid upfront, and $365 if paid in 2 separate payments.