New Jersey Car Insurance

By Javier Marín, Editor·Last reviewed September 2026·How we check this

New Jersey runs a choice no-fault insurance system — every NJ auto policy includes Personal Injury Protection (PIP), and every driver elects either a Basic Policy or a Standard Policy when choosing a carrier. The state is the only one in the U.S. that lets a driver legally register a vehicle with no bodily-injury liability coverage.

Basic Policy

The Basic Policy is the lower-cost option, with these mandatory coverages:

$15,000 PIP per person (up to $250,000 for catastrophic injuries).
$5,000 Property Damage Liability.
No bodily injury liability required (optional add-on at $10,000 per accident).

The Basic Policy is intended for drivers with minimal assets. It carries the lowest premiums in NJ but exposes the driver personally if a crash causes injury beyond the optional add-on coverage. Most carriers offer Basic Policies to qualifying applicants under the New Jersey Personal Automobile Insurance Plan.

Standard Policy

The Standard Policy is the typical NJ policy for drivers who own homes, have meaningful assets, or want adequate liability protection:

$25,000 per person / $50,000 per accident bodily injury liability (the 25/50 minimum).
$25,000 property damage liability.
$15,000 PIP (up to $250,000 catastrophic).
Uninsured/underinsured motorist coverage matching the bodily-injury limits.
Comprehensive and collision (optional but typically required by lenders).

Standard limits can be raised — common upgrades include 50/100/50 or 100/300/100. Higher limits modestly affect premiums.

Choice no-fault

NJ's no-fault system pays the policyholder's medical bills through PIP regardless of who caused the crash, up to the PIP limit. Liability coverage applies only when the injured party meets the verbal threshold (under Limited Right to Sue) or any threshold (under Unlimited Right to Sue). The "choice" element is the policyholder's election between these two right-to-sue options at policy issuance.

Limited Right to Sue

The Limited Right to Sue election restricts the policyholder's right to sue another driver for pain and suffering unless the injury meets one of six statutory thresholds:

Death.
Dismemberment.
Significant disfigurement or scarring.
Displaced fractures.
Loss of a fetus.
Permanent injury (medical evidence required).

The Limited election typically saves 10-20% on the premium. Most NJ drivers elect Limited.

Unlimited Right to Sue

The Unlimited Right to Sue election preserves the right to sue for pain and suffering at any injury threshold, including soft-tissue injuries (whiplash, strains, etc.). It costs more but provides full personal-injury recovery rights. Households with children or commercial drivers often elect Unlimited.

The PIP coverage stack

NJ PIP pays:

Medical expenses for the policyholder, household members, and passengers in the vehicle.
Lost wages up to $100/day, $5,200 maximum.
Essential services not provided due to injury.
Survivor and funeral benefits.

PIP applies before any private health insurance and regardless of fault. PIP claims are filed within 90 days of the crash to the auto insurer; private health insurance pays only after PIP is exhausted.

SR-22 and FR-2

Drivers who have had a DWI, no-insurance suspension, repeat moving violation, or court-ordered insurance requirement must file financial responsibility documents:

SR-22 — for most NJ post-suspension drivers, filed by the carrier with the NJ Department of Banking and Insurance. Maintained for 3 years.
FR-2 (rare) — for drivers required to demonstrate higher limits.

SR-22 carriers in NJ include the major carriers and a few specialty markets. SR-22 premiums run 20-50% higher than equivalent non-SR-22 coverage. A lapse during the 3-year period triggers immediate license re-suspension. See NJ suspended license.

Premium drivers in NJ

NJ has historically had some of the highest auto insurance premiums in the country, driven by:

High population density and accident frequency.
Costly repairs and medical inflation.
Mandatory PIP and PDL on every policy.
Litigation environment under the no-fault system.

Discounts are available for multi-vehicle households, multi-policy bundling (home + auto), telematics enrollment, defensive driving certificates, and good-student status for under-25 drivers. Each carrier publishes its own discount menu.

Pulling a current ID card

NJ requires every driver to carry an insurance ID card in the vehicle. Most carriers issue digital ID cards through their app; both digital and printed cards are accepted by NJ law enforcement. The ID card must show the policyholder, the vehicle by VIN, the policy number, and the effective dates.

The choice between Basic and Standard Policy, and between Limited and Unlimited Right to Sue, materially affects the premium. Most NJ households should at least price the Standard Policy with Limited Right to Sue as a baseline before considering the Basic Policy — see NJ vehicle registration for the registration-side proof requirements.