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

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.

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 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 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 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.

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, 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 uses no-fault without a tort choice, while Pennsylvania also offers a tort choice with much lower minimums.