As of January 1, 2026, New Jersey's standard auto policy requires at least $35,000 per person and $70,000 per accident in bodily injury liability, $25,000 in property damage liability, Personal Injury Protection (PIP), and uninsured/underinsured motorist coverage. You also choose a right-to-sue option. The cheaper "limitation on lawsuit" option means you can only sue for pain and suffering after a serious or permanent injury, so this one choice can shape your claim after a crash.
Most people buy car insurance the way they sign app terms: quickly, and without reading. In New Jersey, that's risky. The choices on your coverage selection form decide who pays your medical bills, how much protection you have against an uninsured driver, and whether you can sue the person who hurt you.
As injury lawyers, we often meet people who learn what their policy says only after a crash, when it's too late to change it. This guide walks you through New Jersey car insurance in plain English, so you can make those choices now.
Key points at a glance
New 2026 minimums: 35,000/70,000 bodily injury and $25,000 property damage liability on a standard policy.
PIP pays first: your own policy covers your medical bills after a crash, no matter who was at fault.
Right to sue is a choice: if you don't pick one, New Jersey law gives you the limitation on lawsuit option.
The basic policy is bare-bones: it has no uninsured motorist coverage and very little liability protection.
You can change coverage anytime, not only at renewal.
What Car Insurance Is Required in New Jersey?
New Jersey offers two main types of auto policies: the standard policy, which most drivers have, and the low-cost basic policy. A third option, the Special Policy, is only for drivers who qualify for federal Medicaid with hospitalization.
A New Jersey standard policy must include:
Bodily injury liability: pays for injuries you cause to other people.
Property damage liability: pays for damage you cause to someone else's car or property.
Personal Injury Protection (PIP): pays your own medical bills after a crash, regardless of fault.
Uninsured/underinsured motorist coverage (UM/UIM): protects you when the at-fault driver has no insurance or not enough.
Collision and comprehensive coverage, which pay to repair your own car, are optional under state law. Your lender or leasing company may still require them.
New Jersey Minimum Car Insurance Limits for 2026
New Jersey raised its minimum liability limits in stages under a 2022 law. Since January 1, 2026, a standard policy must carry at least:
$35,000 per person for bodily injury
$70,000 per accident for bodily injury
$25,000 per accident for property damage
For comparison, the minimums from 2023 through 2025 were $25,000 per person and $50,000 per accident for bodily injury.
Minimum doesn't mean enough. Hospital stays, surgery and lost wages can pass $35,000 quickly. If you cause a serious crash and your limits run out, you could be personally responsible for the rest. Many drivers choose 100,000/300,000 or higher, and the state's own buyer's guide lists limits up to 250,000/500,000.
Personal Injury Protection (PIP): New Jersey's No-Fault Coverage
New Jersey is a no-fault state. After a crash, your own PIP coverage pays your medical bills first, no matter who caused it.
On a standard policy, you choose your PIP medical limit:
Options include $15,000, $50,000, $75,000, $150,000 and $250,000. Some insurers offer more.
$250,000 is the most common choice, according to the New Jersey Department of Banking and Insurance.
Even a lower limit comes with up to $250,000 for certain serious injuries.
Your PIP deductible is often $250, and you typically pay 20% of the next $5,000 in medical bills.
You can also make your health insurance primary for crash injuries, which lowers your premium. Medicare and Medicaid can't be used this way, so check whether your health plan covers auto injuries before you choose it.
Most drivers also keep the extra PIP package: income continuation (lost wages), essential services (help with chores you can't do), a death benefit and funeral expenses.
Want to see how PIP fits with the rest of your claim? Read our posts on PIP, BI and UIM coverage and how no-fault insurance really works.
Uninsured and Underinsured Motorist Coverage
Not every driver on the road follows the rules. UM/UIM coverage steps in when the driver who hit you:
Has no insurance at all
Flees the scene and is never found
Has insurance, but not enough to cover your injuries
A standard policy must include a minimum amount of UM/UIM coverage, and you can buy more, up to the liability limits you choose. This is often the most underrated coverage on a policy. If a minimum-limits driver seriously injures you, your own UIM coverage may be what actually pays for your recovery.
Your Right to Sue: Limitation on Lawsuit vs. No Limitation
This is the most important choice on a New Jersey policy, and most people don't remember making it.
Limitation on lawsuit (also called the verbal threshold or limited right to sue): You can only sue for pain and suffering if your injury falls into one of these categories:
Death
Dismemberment
Significant disfigurement or scarring
A displaced fracture
Loss of a fetus
A permanent injury, meaning a body part that has not healed to function normally and will not with further treatment
No limitation on lawsuit (unlimited right to sue): You can sue for pain and suffering for any injury caused by another driver's negligence.
A few details matter here:
The limitation option costs less, which is why many drivers have it.
If you don't choose, New Jersey law gives you the limitation on lawsuit option by default.
Your choice covers your household: it applies to you, your spouse and relatives living with you who don't have their own auto policy.
It doesn't affect economic losses. Medical bills and lost wages are handled through PIP and, when bills exceed your PIP limit, a claim against the at-fault driver.
How the Limitation on Lawsuit Option Plays Out After a Crash
With the limitation option, a permanent injury must be proven with objective clinical evidence, such as an MRI or nerve test, and a doctor must certify it under penalty of perjury. Pain alone isn't enough.
The good news: the New Jersey Supreme Court held in DiProspero v. Penn (2005) that you don't also have to prove the injury had a "serious impact" on your life. A properly proven permanent injury meets the threshold.
In practice, this means injuries like a herniated disc, a torn ligament or nerve damage often turn on medical evidence. Consistent treatment and good imaging can decide whether you can recover pain and suffering at all.
Standard Policy vs. Basic Policy in New Jersey
The basic policy is New Jersey's lowest-cost option. It keeps you legal, but it offers very little protection:
PIP: $15,000 per person, plus up to $250,000 for certain serious injuries
Property damage liability: $5,000
Bodily injury liability: not included, though $10,000 per accident is available as an option
Uninsured/underinsured motorist coverage: none
Right to sue: limited
If you cause a crash with a basic policy, you may have little or no coverage for the other driver's injuries. And if an uninsured driver hits you, there's no UM coverage to fall back on. Drivers with savings, a home or other assets to protect should think carefully before choosing it.
How to Check Your New Jersey Car Insurance Policy
You don't need to read your entire policy. Find your declarations page (often called the "dec page") and check these lines:
Bodily injury and property damage limits: at least 35,000/70,000/$25,000 for 2026.
PIP medical limit and deductible: how much is covered and what you pay first.
Health insurance as primary: whether you chose this option.
UM/UIM limits: ideally matching your liability limits.
Lawsuit option: "limitation on lawsuit" or "no limitation on lawsuit."
You can change your coverage at any time, not just at renewal. If something looks wrong, call your insurance agent now, before you need it.
Choosing the Right Coverage: An Injury Lawyer's Perspective
We can't tell you which policy to buy, and your agent can quote the exact cost of each option. But here's what we see on the other side of a crash:
Higher liability limits protect your savings and your home if you're ever at fault.
UIM coverage that matches your liability limits often makes the biggest difference when someone else hurts you.
The no limitation option can matter most for injuries that are painful and disruptive but hard to prove permanent, such as soft-tissue injuries.
A higher PIP limit helps if you'd face surgery or long treatment.
The cheapest policy can turn out to be the most expensive one after a serious crash.
What to Do After a Car Accident in New Jersey
If you've been in a crash, your insurance choices are already set. Focus on protecting your health and your claim:
Get medical care right away and tell your own insurer, since PIP pays first
Request your police report and check it for errors. Our NJ car accident report lawyer page explains how
Follow the steps in our NJ car accident checklist
Don't give a recorded statement to the other driver's insurer until you've talked to a lawyer
Keep the deadline in mind: most New Jersey injury lawsuits must be filed within 2 years, as our guide to the NJ statute of limitations for personal injury explains
The attorneys at Barreto Law Firm handle claims involving car accidents, truck crashes, Uber and Lyft accidents, delivery and commercial fleet crashes and pedestrian accidents. We review your policy for free, find every coverage that may pay, and work to meet the verbal threshold when it applies. There's no fee unless we win, as our personal injury lawyer cost page explains.
Wondering whether a settlement would be taxed? Most aren't. See our guide: Are personal injury settlements taxable in New Jersey?
Frequently Asked Questions About New Jersey Car Insurance
What is the minimum car insurance in New Jersey for 2026?
A standard New Jersey policy must carry at least $35,000 per person and $70,000 per accident in bodily injury liability, $25,000 in property damage liability, PIP, and uninsured/underinsured motorist coverage. These minimums took effect January 1, 2026.
Is New Jersey a no-fault state?
Yes. Your own Personal Injury Protection (PIP) coverage pays your medical bills after a crash, no matter who caused it. You can still bring a claim against the at-fault driver for losses PIP doesn't cover, subject to your lawsuit option.
What is the limitation on lawsuit option in New Jersey?
It's a lower-cost choice that limits when you can sue for pain and suffering. You can only sue if your injury is death, dismemberment, significant disfigurement or scarring, a displaced fracture, loss of a fetus, or a permanent injury proven with objective medical evidence.
What happens if I didn't choose a lawsuit option?
If you didn't make a choice on your coverage selection form, New Jersey law gives you the limitation on lawsuit option by default. Check your declarations page to see which option you have.
Can I change my right-to-sue option after an accident?
No, not for that accident. The option in effect on the day of the crash applies to your claim. You can change your coverage at any time going forward.
Is the basic policy enough in New Jersey?
It meets the legal minimum, but it offers very limited protection. It includes only $5,000 in property damage liability, no bodily injury liability unless you add $10,000, and no uninsured motorist coverage. A serious crash can leave you exposed.
Does my lawsuit option affect my medical bills?
No. The lawsuit option only affects pain and suffering. Your medical bills are paid through PIP, and bills above your PIP limit can be claimed against the at-fault driver.
Not Sure What Your Policy Covers? Get a Free Review
After a crash, the right coverage can make all the difference. Barreto Law Firm helps injured people in Rockaway, across Morris County and throughout New Jersey and New York find every policy that may pay and build strong claims. Call 862-418-3389 or request your free case review. No fee unless we win. Hablamos español.
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This article is for general information only and is not legal or insurance advice. Coverage options and prices vary by insurer, so speak with a licensed insurance agent about your policy and a New Jersey attorney about any injury claim. Reading this article does not create an attorney-client relationship. No aspect of this advertisement has been approved by the Supreme Court of New Jersey.