New Jersey Minimum Auto Insurance Requirements
Are you new to New Jersey? If so, you need to understand the New Jersey minimum auto insurance requirements to make sure you are legal when you are driving in the Garden State. Every state in the country has minimum insurance requirements that vary from state to state. You must purchase car insurance in the minimum amounts, or you can face fines from the state, in addition to being liable for substantial damages if you cause a car accident while driving uninsured.
Required Limits for Car Insurance in New Jersey — Basic Policy
First, every driver must carry some specific insurance coverages to be considered “legal” for driving in the state. There are two basic insurance policies available for New Jersey drivers. Each policy has its pros and cons; therefore, you should discuss the policies in details with an insurance agent before deciding which policy is best for you. Below is a summary of the coverage in a Basic Policy.
A Basic Policy does not include all coverages that the Standard Policy includes and it has a limitation on the right to sue, but it does provide you with the minimum insurance requirements for driving in the state.
A Basic Policy provides:
- No Bodily Injury Liability coverage but you can purchase coverage as an option
- $5,000 for damage to property of another person
- $15,000 for one individual and $30,000 for an accident in Personal Injury Protection (PIP) coverage with up to $250,000 coverage for certain injuries
- No Uninsured or Underinsured Motorist coverage
- An option to purchase Collision or Comprehensive coverage
Standard Insurance Policy in New Jersey
The Standard Insurance Policy provides additional coverage, but it does have a higher premium compared to a Basic Policy. One of the key differences is the right to choose between an Unlimited Right to Sue and a Limited Right to Sue with a Standard Insurance Policy.
The coverage you receive with a Standard Insurance Policy includes:
- $15,000 for one person and $30,000 for an accident in Bodily Injury Liability coverage with the ability to purchase up to $250,000 per person and $500,000 per accident in coverage
- $5,000 in property damage insurance to cover damage to another person’s property but you can purchase up to $100,000 or more in coverage
- $15,000 for one person or $30,000 for an accident in Personal Injury Protection (PIP) coverage with $250,000 in coverage for certain injuries and the option to purchase up to $250,000 or more in coverage for all injuries
- Uninsured and Underinsured Motorist coverage is available as an option in amounts up to the amounts selected for liability coverage
- Collision and Comprehensive coverage is available as an option
Special Automobile Insurance Policy (SAIP)
The SAIP insurance policy is available to drivers who qualify for Federal Medicaid with hospitalization. This type of insurance is designed to make limited insurance coverage affordable for individuals who may not be able to afford insurance because of a low or fixed income. It is a medical coverage only policy for $365 per year. However, not all Federal Medicaid programs qualify for the coverage; therefore, individuals must discuss requirements with an insurance agent that offers SAIP coverage.
Limited Right to Sue vs. Unlimited Right to Sue
A Basic Policy has a limited right to sue while the Standard Policy allows you to choose an option. The right to use only applies to non-economic damages such as pain and suffering damages.
If you choose the Unlimited Right to Sue or No Limitation on Lawsuit Option, you retain the right to file a lawsuit for non-economic damages resulting from a car accident. If you choose the Limited Right to Sue or Limitation on Lawsuit Option (or you purchase a Basic Policy), you cannot sue the person who caused the car accident for pain and suffering damages unless you sustain one of six certain injuries. Because car accidents can result in traumatic, permanent injuries, you should carefully examine all options before deciding.
The New Jersey Department of Banking and Insurance provides a comprehensive Guide to Automobile Insurance that provides information on everything you need to know about purchasing car insurance in New Jersey.