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Minimum Car Insurance Requirements in New Jersey

Here's what you need to know...
  • New Jersey mandates drivers carry $5,000 in property damage liability and $15,000 in personal injury protection
  • The penalties for not carrying insurance in New Jersey are significant
  • An underinsured driver may find themselves personally responsible for any judgment amount beyond what the policy covered
  • Comparison shopping helps drivers in New Jersey find affordable and expanded auto insurance coverage

New Jersey might not be the biggest of the 50 states, but it is definitely one with a lot of traffic. The northern end of the state is close to New York City and, 90 miles south, the Delaware River separates New Jersey from the highly-populated city of Philadelphia.

The coastline of New Jersey attracts millions of vacationers, many from the inland sections of the state. Highways crisscross the Garden State, and few roads are found to be empty.

Due to all the consistent traffic, legislators in the state of New Jersey take additional steps to regulate auto insurance rules.

What makes New Jersey unique from various other states is New Jersey is a no-fault insurance state, which has a bearing on how auto insurance policy claims are filed and settled.

As part of the no-fault rules, the law mandates auto insurance for residents. To remain in compliance with the law, certain minimum coverage requirements must be in place.

If you live in New Jersey and need better auto insurance, compare at least three to four policies today! Enter your ZIP code above to begin!

Minimum Car Insurance Requirements in New Jersey

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A basic car insurance policy in New Jersey satisfies the minimum amount threshold. With the basic policy, a driver must carry $5,000 in property damage liability and $15,000 in personal injury protection coverage.

Personal injury protection refers to a type of coverage that protects the driver and others listed on the policy in the event of an accident. Personal injury protection helps reduce lawsuits by requiring the injured party to file a claim against their own policy.

On a basic policy, the minimum amounts are quite low and come with a clause subjecting the policyholder to a “limited right to sue.” Many drivers opt to purchase a costlier standard policy that allows for acquiring bodily injury liability coverage.

The liability coverage comes with limits ranging from $15,000 per person/$30,000 per accident to a high of $250,000 per person/$500,000 per accident.

In addition, the driver has a choice of selecting “limited right to sue” or “unlimited right to sue.” They can also boost property damage liability coverage as well.

Although insurance is mandated by law, not everyone chooses to follow the law. So, what happens if a resident chooses not to buy insurance?

— Penalties for Driving Without Car Insurance

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Those choosing to drive without insurance would be making a huge mistake. The law comes down hard on a first-time offender.

The sanctions for a first-time offense are as follows:

  • A fine ranging from $300 to $1,000
  • A sentence to perform community service
  • The imposition of a $250 DMV surcharge for three full years
  • A license suspension of one year

In light of the penalties, purchasing insurance ends up being the less-costly option. Beware of becoming too comfortable with buying only the minimum amounts.

Being underinsured brings forth many of its own troubles.

— Penalties for Not Having Enough Coverage

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A driver who ends up being sued beyond their policy limits is financially responsible for the damages beyond the policy.

In other words, an insurance policy that pays out a maximum of $300,000 per accident is contractually obligated to the limit and not beyond. So, if the accident causes $380,000 in losses, the remaining $80,000 ends up being owed by the driver.

It is best to acquire an appropriate amount of insurance based on personal net worth and assets. Getting the necessary amount could require not only maxing out insurance coverage but also purchase an umbrella policy to add further protection.

Why You Need Car Insurance Coverage

Despite all the merits car insurance brings forth, some just look at a policy as yet another bill. Few like to pay bills.

Insurance, however, is more than just a financial obligation. Auto insurance is a safety net.

Anyone who has recently purchased their first car is likely thinking about buying a particular car insurance policy. New car insurance customers may be looking at the fees and wondering why they have to even buy a policy.

After all, New Hampshire and Virginia do not require auto insurance. Why does New Jersey?

Here is the bottom line — purchasing an auto insurance policy is critical to the financial health of a driver.

Auto insurance is a form of protection against financial losses. An insurance company takes a customer’s premium money under an agreement to pay settlements on valid claims.

The insurance company takes a risk when selling a policy, but untold numbers of customers help pay for settlements through never filing any claims.

The biggest risk falls on the shoulders of the driver who fails to procure a proper policy. Auto insurance, mandatory or not, keeps drivers from being forced to pay out of pocket for losses big and small as a result of an accident or other peril.

With the best possible and most significant policy in place, many different scenarios are covered. As long as no fraud or misrepresentation is involved, an insurance provider should honor a claim made under a coverage category.

Putting the right policy in place is a tremendous responsibility. Anyone in the market for auto insurance should examine at least four policy quotes to determine the best one.

Getting too comfortable with a particular policy is not always wise, either. Every three years, requesting new quotes is advisable.

Equally advisable is to look beyond mere price. Anyone checking out insurance quotes should look at the full value and protection the policy provides.

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Car Accident and Insurance Stats for New Jersey

Relying on one’s own ability to be a safe driver is not enough to avoid an accident. Accidents do happen, and they can be unavoidable. Negligent drivers and those who ignore traffic laws do create serious hazards on the road.

Alarmingly, on 2012, 10.3 percent of drivers in New Jersey carry no auto insurance coverage, which means no personal injury protection or bodily injury liability protection was in place to cover losses.

Not all car accidents are mere “fender benders” or quickly resolved mishaps. 2016 saw a massive amount of fatalities on the road. 607 traffic accidents ended in fatalities.

Such a figure should alarm anyone who drives in New Jersey. The statistic should give pause for thought among those wondering if they have enough insurance in place.

The statistics related to accidents in New Jersey honestly should give pause for thought.

Records from 2011 reveal there were 249,715 car crashes in New Jersey with more than 61,000 of those accidents causing injuries.

While many millions of drivers never find themselves in an accident, no one knows what the future brings. A combination of poor weather conditions and a momentary distraction is all it takes to cause a major catastrophe.

What is available in addition to the minimum amounts?

The minimum insurance requirements in New Jersey are incredibly small. As noted, very little financial protection is acquired through paying the minimum.

Boosting insurance coverage is advisable and so is going beyond personal injury/bodily injury/property coverage.

The previously mentioned bodily injury liability, personal injury protection, and property damage liability coverage are not the only types of insurance available.

Other categories of insurance capable of paying for losses and damages are:

  • Collision
  • Comprehensive
  • Medical Payments
  • Uninsured Motorist

All these different kinds of coverage contribute to protection in a multitude of scenarios.

The uninsured motorist clause, naturally, covers against an accident caused by someone who has no liability policy in place. Considering that more than 10 percent of New Jersey drivers lack insurance, investing in this type of coverage would be wise.

Collision insurance covers damages a driver causes to their own vehicle. Yes, drivers just might cause damage to their own vehicles. Collision insurance could pay for certain claims based on self-inflicted damage.

Comprehensive insurance is a great catch-all area of coverage that protects against losses inflicted on a vehicle due to weather, theft, fire, and much more.

Just because a car is parked does not mean the vehicle is safe from all manner of damages. Comprehensive coverage does at least add a level of financial safety.

The basic policy option in New Jersey is better than nothing, but not by much. Looking into expanded coverage probably would be a good idea.

How do you save on car insurance premiums?

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Purchasing the minimum amount of coverage might be done solely for the purpose of saving money. There are better, less risky, ways to save money on auto insurance.

Comparison shopping is one of the best ways to find reasonable insurance.

Through comparison shopping, locating insurance providers who make discounts available on policies is possible. Saving money through better consumer shopping is more advisable than buying the bare minimum of auto insurance.

Looking for better and more affordable auto insurance? Start comparison shopping today by entering your ZIP code below!

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