# New Jersey car insurance: Standard vs Basic policies, the 2026 limits and your right to sue

> New Jersey car insurance explained: Standard vs Basic vs Special policies, the 2026 liability minimums, lawsuit options, PIP choices and average cost.

Canonical page: https://statecover-guide.com/location/new-jersey/  
Last reviewed: October 28, 2026 by the StateCover Guide editorial team  
General information, not legal or insurance advice.

## Quick answer

New Jersey car insurance comes in three forms: the Standard Policy most drivers buy, a stripped-down Basic Policy, and a medical-only Special Policy for some Medicaid enrollees. Since January 1, 2026, the Standard Policy's minimum liability limits are $35,000 per person, $70,000 per accident and $25,000 for property damage. Every auto insurance policy also includes personal injury protection (PIP), and you choose whether to limit your right to sue.

## Key facts

| Fact | Detail |
|---|---|
| Standard Policy liability minimums | $35,000 / $70,000 bodily injury, $25,000 property damage |
| Recent change | Standard Policy minimums rose to 35/70/25 on January 1, 2026 (25/50/25 in 2023 to 2025; 15/30/5 before 2023) |
| Fault system | Choice no-fault |
| PIP | Required: $15,000 per person per accident (up to $250,000 for certain injuries) |
| Uninsured motorist (UM) | Required in a Standard Policy: at least $35,000/$70,000 bodily injury and $25,000 property damage |
| Underinsured motorist (UIM) | Required in a Standard Policy (combined UM/UIM coverage, same minimums) |
| Average expenditure (2023) | $1,573.21 a year vs $1,281 nationally |
| Combined average premium (2023) | $1,693.39 a year vs $1,438 nationally |
| Uninsured drivers (2023) | 14.1% vs 15.4% nationally |
| Regulator | New Jersey Department of Banking and Insurance (DOBI), 800-446-7467 (consumer hotline); 609-292-7272 |
| Motor vehicle agency | New Jersey Motor Vehicle Commission |

## Standard, Basic or Special: New Jersey's three auto policies

Most states have one set of minimums. New Jersey lets you pick between policy types with very different protection, so the cheapest legal option and a sensible option can be far apart.

| Feature | Standard Policy | Basic Policy | Special Policy (SAIP) |
|---|---|---|---|
| Bodily injury liability | From $35,000 / $70,000 | Not included; $10,000 per accident optional | None |
| Property damage liability | From $25,000 | $5,000 per accident | None |
| PIP (medical) | From $15,000, higher limits available | $15,000, up to $250,000 for certain injuries | Emergency care; up to $250,000 for serious brain and spinal cord injuries |
| UM/UIM | Included | None | None |
| Cost | Varies by insurer and driver | Usually much lower than Standard | $360 paid in full or $365 in installments |

The state's buyer's guide describes the **Basic Policy** as an option for people with few family responsibilities and few assets, including job income, to protect. Its trade-off is stark: with no bodily injury liability unless you add the small optional amount, a serious crash you cause could leave you personally exposed.

The **Special Automobile Insurance Policy** (SAIP) is set up under N.J.S.A. 39:6A-3.3 for drivers enrolled in federal Medicaid with hospitalization. It pays medical costs only, with a $10,000 death benefit, and has no liability, collision or comprehensive coverage. See [low-cost state programs](https://statecover-guide.com/saving/low-cost-state-programs/) for how it compares with programs in other states.

## What changed on January 1, 2026

New Jersey raised its Standard Policy minimums in steps, and the latest step took effect for policies issued or renewed on or after January 1, 2026. The bodily injury minimum is now $35,000 per person and $70,000 per accident, while the $25,000 property damage minimum did not change. Required uninsured and underinsured motorist limits rose to match.

The increase does not touch the Basic Policy. If you carried the old minimums, your renewal notice should show the higher limits and a higher price for that part of the policy. Our [state minimum coverage changes](https://statecover-guide.com/blog/state-minimum-coverage-changes/) post tracks similar moves in other states.

## Your right to sue: Limitation vs No Limitation on Lawsuit

New Jersey is one of 3 choice no-fault states. On your coverage selection form you pick one of two lawsuit options:

- **Limitation on Lawsuit (limited right to sue):** you give up suing an at-fault driver for pain and suffering unless your injury falls into one of 6 permanent categories, such as a displaced fracture, significant scarring or a permanent injury. You can still sue for economic losses such as medical bills and lost wages.
- **No Limitation on Lawsuit (unlimited right to sue):** you keep the right to sue for pain and suffering for any injury.

If you make no choice, the law imposes the limited option, and the Basic Policy always includes it. The buyer's guide lists the unlimited option among choices that cost more. Read our [tort threshold](https://statecover-guide.com/glossary/tort-threshold/) entry for how these rules work in general.

## PIP choices that change your New Jersey premium

PIP pays your medical bills after a crash regardless of fault, and New Jersey gives you unusual control over it:

1. **Health insurance as primary.** You can make your health plan pay first for crash injuries, which can lower the PIP premium. Medicare and Medicaid cannot be used this way, so check what your plan covers before choosing it.
2. **PIP deductible.** The standard deductible is $250. Higher deductibles cost less; in the state's example, a $2,500 deductible cut the PIP premium by 25%.
3. **Co-payment.** Whatever deductible you pick, a 20% co-payment applies to medical costs between the deductible and $5,000.
4. **PIP limit.** Lower medical limits cost less but leave more of a serious injury to your health plan or to you.

For a fuller explanation, see [personal injury protection](https://statecover-guide.com/coverage/personal-injury-protection/).

## How New Jersey car insurance costs compare

NAIC data put New Jersey's average auto insurance expenditure at $1,573.21 a year in 2023, above the national average of $1,281. The combined average premium for a policy with liability, collision and comprehensive was $1,693.39, also above the national $1,438. The NAIC notes that New Jersey is mostly urban, so comparisons with rural states need care. Those figures are averages across all drivers, so your own quote depends on [ZIP code](https://statecover-guide.com/costs/zip-code/), driving record and vehicle.

## Uninsured drivers and road safety

An estimated 14.1% of New Jersey drivers were uninsured in 2023, below the national estimate of 15.4%. Even so, Basic Policy holders have no UM/UIM, so a crash with an uninsured driver falls back on PIP and any collision coverage.

New Jersey's crash death rate was 7.1 per 100,000 people in 2024, below the national 11.5 per 100,000 people. Speeding was involved in 23% of deaths (national: 29%), and an estimated 24% of drivers killed had a blood alcohol level at or above the legal limit (national: 31%).

Neighbors work differently: [New York](https://statecover-guide.com/location/new-york/) uses no-fault without a tort choice, while [Pennsylvania](https://statecover-guide.com/location/pennsylvania/) also offers a tort choice with much lower minimums.

## FAQ

### Is the New Jersey Basic Policy legal to drive with?

Yes. It meets the state's minimum requirements, but it includes no bodily injury liability unless you add $10,000 of optional coverage, only $5,000 of property damage liability and no UM/UIM. If you own a home, have savings or earn a steady income, the Standard Policy protects those assets far better.

### Did my New Jersey car insurance go up because of the 2026 limits?

If your Standard Policy was at the old minimums, the liability and UM/UIM parts of your premium likely rose at your first renewal on or after January 1, 2026. Insurers had to notify policyholders when limits were raised at renewal.

### What happens if I don't choose a lawsuit option?

The Limitation on Lawsuit option applies by law. You can still sue for economic losses, but pain-and-suffering claims are limited to the permanent injury categories in the law.

### Who qualifies for New Jersey's Special Automobile Insurance Policy?

The Special Policy (SAIP) is for New Jersey drivers enrolled in federal Medicaid with hospitalization. It costs $360 paid in full or $365 in 2 installments and covers medical care only. Call 1-800-652-2471 to find an agent who writes it.

### Can I use my health insurance instead of PIP in New Jersey?

You can make your health insurance the primary payer for crash injuries, which usually lowers your PIP premium. You still carry PIP, and Medicare or Medicaid cannot fill this role. Check your health plan's rules for auto injuries first.

## Sources

- [New Jersey Department of Banking and Insurance, New Jersey Auto Insurance Buyer's Guide](https://nj.gov/dobi/division_consumers/pdf/autoguide2026.pdf) — policy types, lawsuit options, PIP choices
- [New Jersey Department of Banking and Insurance, Bulletin No. 25-06](https://www.nj.gov/dobi/bulletins/blt25_06.pdf) — 2026 minimum liability limits
- [New Jersey Department of Banking and Insurance, Special Automobile Insurance Policy](https://nj.gov/dobi/division_consumers/insurance/saip.htm) — SAIP eligibility and cost
- [NAIC, Auto Insurance Database Report](https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf) — average expenditure and premium
- [Insurance Information Institute, Facts and statistics: uninsured motorists](https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists) — uninsured driver estimate
- [IIHS-HLDI, Fatality Facts: state by state](https://www.iihs.org/research-areas/fatality-statistics/detail/state-by-state) — crash death statistics
- [New Jersey Motor Vehicle Commission, Vehicle Registration](https://www.nj.gov/mvc/vehicles/reginitial.htm), as of October 28, 2026
- [New Jersey Department of Banking and Insurance, Auto Insurance New Jersey Buyer's Guide](https://www.nj.gov/dobi/division%5Fconsumers/pdf/autoguide2026.pdf), as of October 28, 2026
- [New Jersey Revised Statutes section 39:6A-3.3 (via Justia), Establishment of Special Automobile Insurance Policy](https://law.justia.com/codes/new-jersey/title-39/section-39-6a-3-3), as of October 28, 2026
- [Insurance Information Institute, Background on: No-fault auto insurance](https://www.iii.org/article/background-on-no-fault-auto-insurance), as of October 28, 2026
- [NAIC, 2022/2023 Auto Insurance Database Report](https://content.naic.org/article/naic-releases-20222023-auto-insurance-database-report), as of February 13, 2026
- [Insurance Research Council, Uninsured and Underinsured Motorists: 2017–2023 (press release)](https://www.businesswire.com/news/home/20250220231032/en), as of February 20, 2025
- [New Jersey Legislature, P.L.2022, c.87 (N.J.S.A. 17:28-1.1, 39:6A-3, 39:6B-1)](https://pub.njleg.gov/Bills/2022/PL22/87_.HTM), as of August 5, 2022