New Jersey, like almost every other state in the county, requires that vehicles registered in the state be insured with various types of car insurance. However, unlike most other states, the limits of coverage required by the state in order for a vehicle to be legal are not set in stone. New Jersey car insurance law requires that every vehicle have three specific types of coverage in order to be legally driven on public roads. Like most states, one of the types of coverage that New Jersey requires its residents to purchase is liability coverage. Liability coverage, which is designed to financially protect the policy holder from any injuries or damages sustained in an accident that was their faults, is typically seen in tort states where fault is placed on one driver or another but New Jersey’s hybrid no-fault car insurance system still allows fault to be placed on a driver in certain circumstances. The most basic policy required by New Jersey requires only that a driver obtain property damage liability insurance in the amount of $5,000 or more. A standard policy in New Jersey includes $15,000 in per person bodily injury coverage and $30,000 in per accident bodily injury coverage though this type of liability coverage is optional, meaning that New Jersey residents can decide for themselves whether or not they would like to add bodily injury coverage to their policy. If a driver opts for a basic policy and does not include bodily injury liability coverage they will still be financially responsible for any injuries sustained in an accident that is their fault. This can leave New Jersey drivers open to lawsuits from other drivers and even wage garnishments by the state if the uninsured driver cannot pay for the other party’s injuries. According to the state of New Jersey the basic policy is recommended for drivers with few family considerations and limited financial assets. Young drivers and drivers that are single often opt for the basic policy as a means to save money.
In addition to liability coverage New Jersey also requires residents to maintain personal injury protection coverage on any vehicle they own. Personal injury protection works in much the same way as bodily injury liability coverage though instead of paying for the injuries of everyone involved in an accident other than the policy holder personal injury protection will pay for the injuries of the policy holder and will also typically cover injuries sustained by passengers in the policy holder’s vehicle. The minimum amount of personal injury protection that must be purchased with an auto insurance policy in New Jersey is $15,000 for both the basic and standard policies though most residents are eligible to purchase as much as $250,000 in personal injury protection if they wish. Uninsured motorist coverage is the last of the three types of coverage required by the state of New Jersey. As its name suggests, uninsured motorist coverage is intended to protect the policy holder in the event that they are in an accident with an uninsured motorist. Uninsured and underinsured motorist coverage must be carried in amounts that are equal to the chosen bodily injury liability coverage amounts. As with bodily injury liability coverage, uninsured and underinsured motorist coverage is not included in the basic policy offered to New Jersey residents. The basic policy also does not offer payments for legal fees in the event that the policy holder is sued by a driver involved in an accident. For those New Jersey drivers that would like to purchase collision and comprehensive coverage, both of which cover damage to the insured vehicle, the purchase of a standard policy is required since basic policy does not allow for the purchase of these optional forms of coverage. Despite the various options available to drivers in New Jersey the state still has the second highest insurance cost in the country with residents paying an average of $1,152 per year in car insurance premiums.
If a New Jersey motorist is caught driving without car insurance in their home state they will be subject to a citation and will more than likely be required to pay a fine. Uninsured drivers also run the risk of having their license or registration suspended if they are caught by law enforcement while driving uninsured on a public road. The first time a driver is caught driving without insurance in New Jersey they will face a minimum $300 fine that could be as much as $1,000 depending on the situation and the driver’s record. Community service is also another common penalty for driving uninsured. In addition to fines uninsured drivers may have to pay as much as $250 in DMV surcharges for up to three years and will also be responsible for paying any court costs that are associated with the infraction.