New Jersey like most other states requires drivers to have some form liability car insurance coverage. This requirement helps to ensure that if you manage to get into a car accident where you hurt another person or damage their property, some of the financial costs involved will be addressed. Like other states, New Jersey sets its own minimums regarding how much coverage you need and what will suffice to comply with the law.
New Jersey Car Insurance Requirements
One difference in New Jersey is that consumers can opt for two different types of policies: a Standard Policy and a Basic Policy. Unlike other states that have a single set of minimum coverage limits, state minimums for auto insurance in New Jersey will depend on what type of policy you choose. This table below summarizes the various limits and types of coverages, with more information below.
|NJ Requirements||Basic Policy Min. Limits||Standard Policy Min. Limits|
|Bodily Injury (BI)||Not Required but available||$15,000 per person / $30,000 per accident|
|Property Damage||$5,000 per accident||$5,000 per accident|
|Personal Injury Protection (PIP)||$15,000 per person / accident||$15,000 per person / accident|
|Uninsured/Underinsured Motorists||Not required and not available||Not required but available|
|Collision and Comprehensive||Not required; availability differs by insurer||Not required but available|
Basic policies are much cheaper than a standard policy auto coverage. They also consist of lower limits and do not offer all the components a standard policy will. In exchange the cost of having coverage is much lower as it protects you from less.
- Bodily Injury Liability: Coverage for third party bodily injury is not automatically included in a Basic Policy. This means that your carrier will not contribute towards any claims made by parties you injure in an at-fault accident. A $10,000 coverage limit for all persons is available as an add-on option for any basic policy.
- Property Damage: $5,000 coverage limit
- Personal Injury Protection: $15,000 per person per accident limit. With additional coverage of up to $250,000 for certain injuries including permanent and significant brain injury, spinal cord damage, disfigurement or for medical treatment necessary for other permanent injuries.
- Uninsured and Underinsured motorist coverage: is not offered with a basic policy and generally cannot be added on as additional coverage.
- Collision and Comprehensive coverage: can be added as additional coverage if you choose a basic policy but may not be offered by all insurers.
Basic policies also limit the consumers right to sue.
For consumers familiar with car insurance coverage in other states, New Jersey's standard policy auto coverage is very similar. The state establishes minimums with respect to bodily injury, property damage and personal injury protection. The minimum requirements
- Bodily Injury Liability: $15,000 coverage limit per person with a $30,000 total coverage per accident. The maximum per person and per accident limits for Bodily Injury Liability on a Standard Policy are $250,000 and $500,000 respectively.
- Property Damage: $5,000 coverage limit per accident.
- Personal Injury Protection: $15,000 per person per accident. The maximum per person per accident limit for personal injury is $250,000. Like a basic policy regardless of your chosen limit personal injury protection will cover up to $250,000 in claims for injuries including permanent and significant brain injury, spinal cord damage, disfigurement or for medical treatment necessary for other permanent injuries.
- Uninsured and Underinsured Motorist Coverage: Not automatically included but available as an additional option.
- Collision and Comprehensive: Available as an additional option from all insurers under a standard policy.
Your Right To Sue And Legal Limitations
Motorists that elect a Standard Auto Insurance policy will be asked to select an option with regards to their right to sue. The choices are between a limited right to sue like a Basic Policy or an unlimited right to sue that broadens your legal options. The option you choose will impact the total premiums you end up paying for your coverage, with unlimited rights equating to higher quotes. If you do not explicitly elect an unlimited right to sue, insurers will opt you into a limited right to sue.
Consumers should also note that the following limitations are not exclusive to the driver of the policy. If elected the limited right to sue also applies to your spouse, children or any other relatives living in the same residence that do not have their own auto insurance policy.
Limited Right To Sue
Under a limited right to sue policy you can still sue for financial / economic damages related to your accident. This can include medical expenses, property related damages as well as any loss of wages related to injuries suffered through the accident. Where your legal recourse is restricted are for lawsuits related to pain and suffering resulting from an accident. A limited policy will prohibit you from pursuing pain and suffering damages except in the following cases:
- loss of a body part
- significant disfigurement or significant scarring*
- a displaced fracture
- loss of a fetus
- permanent injury (Any injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment based on objective medical proof.)
*significant disfigurement or scarring is a legal term. In these cases it's not a medical definition but generally based on how a "reasonable person" would react upon seeing the scar or injury. In many cases juries and the public apply different standards to such injuries suffered by women vs men with jurors applying a more favorable standard for women
Unlimited Right To Sue
In contrast the unlimited right to sue permits the motorist to pursue pain and suffering related financial compensation for any type of injury. This can open legal recourse for conditions that might result from minor but still debilitating injuries arising from a car accident. Some less serious injuries may cause discomfort or pain for prolonged periods. In these situations an unlimited right to sue could yield some benefits.
Premium Differences Between Limited vs Unlimited Right To Sue
Drivers' car insurance rates in New Jersey will vary in part due to which option they choose. Because legal options are restricted under the limited version, those policies tend to be cheaper, as our graph below shows.
Other Legal Limitations
In New Jersey insurance companies and agents can not be held liable with regards to any choices you make about coverage limits or your right to sue. This means that if you choose a coverage limit or type of policy through the company or agent and later find that the coverage is insufficient, you will generally been unable to pursue the company itself.