New Jersey Auto Insurance Requirements: Coverage and Penalties

New Jersey auto insurance requirements changed on January 1, 2026. Every driver must carry either a Standard Policy, with minimum bodily injury liability of $35,000 per person and $70,000 per accident, $25,000 in property damage liability, Personal Injury Protection, and matching uninsured/underinsured motorist coverage, or a Basic Policy, with $5,000 in property damage liability and $15,000 in PIP.¹ You also elect a tort option that controls when you can sue for pain and suffering, and you have to keep proof of coverage in the car whenever you drive.

The Two Policy Choices

New Jersey lets drivers pick between two insurance frameworks. The Standard Policy, governed by N.J.S.A. 39:6A-3, is the default and provides real protection across liability, medical, and uninsured motorist coverage.² The Basic Policy, authorized under N.J.S.A. 39:6A-3.1, satisfies the legal requirement to be insured but strips coverage down to bare minimums.³

The choice matters because the two policies behave very differently after an accident. What follows applies to whichever one you carry.

Standard Policy Minimum Limits

For any Standard Policy issued or renewed on or after January 1, 2026, liability minimums are $35,000 per person and $70,000 per accident for bodily injury, plus $25,000 per accident for property damage.⁴ Written in shorthand, that’s 35/70/25. If you renewed before that date and still see the old 25/50/25 limits, your next renewal moves you to the new figures automatically.¹

Liability insurance pays for injuries and property damage you cause to other people when you’re at fault. Even at 35/70/25, these limits are low relative to what a serious crash costs; a single hospital stay for traumatic injuries can exceed $70,000, and anything above the limit comes out of your own pocket. Insurers must offer higher limits up to at least $250,000/$500,000 for bodily injury and $100,000 for property damage.⁴

Basic Policy Minimum Limits

The Basic Policy requires only $5,000 in property damage liability per accident and no bodily injury liability at all.⁵ A $10,000 bodily injury liability add-on is available but optional. Without it, if you cause an accident that injures someone, you have no insurance covering their medical bills; the injured person can sue you directly, and a judgment can lead to wage garnishment and liens on property you own.

The Basic Policy also excludes uninsured and underinsured motorist coverage entirely, and that coverage cannot be added on. It’s a legal way to get on the road for drivers with no assets to protect. For anyone else, the premium savings rarely justify the exposure.

Personal Injury Protection

Personal Injury Protection, or PIP, is the no-fault coverage that pays your medical bills after a crash regardless of who caused it. Both policies must include it. Under the Basic Policy, PIP is fixed at $15,000 per person per accident.³ Standard Policy holders choose from $15,000, $50,000, $75,000, $150,000, or $250,000.⁶

PIP covers you, household family members, and passengers in the insured vehicle. It also covers you as a pedestrian if a car hits you. Certain services like physical therapy require a referral from a licensed physician, dentist, podiatrist, or chiropractor before the insurer will reimburse them.⁷

Regardless of the PIP limit you select, the law guarantees up to $250,000 in medical expense coverage for certain severe injuries: permanent or significant brain injury, spinal cord injury, or disfigurement, and treatment at a trauma center or acute care hospital immediately after an accident for other permanent or significant injuries until the patient is stable.⁵ Both policies carry this backstop.³

Uninsured and Underinsured Motorist Coverage

Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage protects you when the other driver has no insurance or not enough of it. Every Standard Policy must include UM and UIM at minimum limits matching the bodily injury liability minimums, which for 2026 means at least $35,000 per person and $70,000 per accident.⁸ You can buy higher UM/UIM limits up to your liability coverage amount, but not beyond it. UM/UIM property damage is subject to a $500 deductible per accident, and hit-and-run vehicles are excluded from property-only claims.

Basic Policy holders get none of this. If you carry a Basic Policy and an uninsured driver hits you, your only recourse is your own PIP for medical bills and whatever you can recover by suing the other driver personally.⁵

Choosing a Tort Option

New Jersey’s no-fault system limits when you can sue another driver for non-economic damages like pain and suffering. When you buy a Standard Policy, you have to pick between two tort options that directly affect your legal rights after an accident.

The “limitation on lawsuit” option, commonly called the verbal threshold, costs less but restricts your ability to sue for pain and suffering. You can only pursue non-economic damages if your injuries meet one of six criteria: death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury other than scarring.⁹ A treating physician or board-certified doctor must certify the qualifying injury based on objective clinical evidence. Soft-tissue injuries like whiplash often fail this test.

The “no limitation on lawsuit” option, sometimes called zero threshold, preserves your full right to sue for any injury, no matter how minor, and costs more in premiums. Either way, you can always sue for economic losses like lost wages and out-of-pocket medical costs; the tort election only restricts non-economic claims. Basic Policy holders are automatically subject to the verbal threshold and cannot elect the zero threshold.

Proof of Insurance in the Vehicle

You must carry proof of insurance whenever you drive. N.J.S.A. 39:3-29 requires drivers to have their insurance identification card, driver’s license, and registration in their possession while operating a vehicle on New Jersey roads. Failing to produce the insurance card carries a flat $150 fine for regular drivers and $250 for bus operators.¹⁰

Paper cards and electronic versions on a phone or tablet are both accepted.¹¹ The electronic card must display the same information as a paper one, including the insurer’s name, policy number, and effective and expiration dates.¹² If you show up to court with a valid card, license, and registration that were all in force on the date you were cited, the judge can dismiss the charge, though court costs may still apply.¹⁰

Penalties for Driving Uninsured

Driving without the required insurance is far more expensive than maintaining a policy, and the penalties escalate sharply between first and subsequent offenses.

First offense: a fine between $300 and $1,000, a period of community service set by the court, and a discretionary license suspension of up to one year.
Subsequent offense: a fine of up to $5,000, 14 days in jail, 30 days of community service, and a discretionary license suspension of up to two years.

Courts weigh whether losing driving privileges would cause extreme hardship when deciding how long to suspend a license.¹³ After any suspension expires, you must apply to the Motor Vehicle Commission for reinstatement, and the chief administrator can deny the application if they believe you’re likely to drive uninsured again.

On top of court-imposed penalties, the MVC adds a surcharge of $250 per year for three years, totaling $750, for operating an uninsured vehicle.¹⁴ To restore a suspended license, you must pay at least 5% of any outstanding surcharge balance plus a $100 restoration fee. Between fines, surcharges, reinstatement fees, and the premium increases that follow, a lapse in coverage routinely costs several thousand dollars more than the insurance would have.

What a Personal Policy Doesn’t Cover

Personal auto policies generally exclude coverage when you use your vehicle for commercial purposes, including driving for a rideshare or delivery platform. If you’re logged into a rideshare app when a crash happens, your personal insurer can deny the claim even without a passenger in the car. New Jersey requires transportation network companies to maintain insurance for their drivers, but limits vary by trip stage: lower while you wait for a request with the app on, higher once you accept a ride through drop-off. A rideshare endorsement on your personal policy can fill the waiting-period gap. If you drive for any app-based service, tell your insurer; failing to do so risks claim denials and could void other coverages like collision and comprehensive.

1
State of New Jersey. Department of Banking and Insurance Bulletin No. 25-06
2
Justia. New Jersey Code 39-6A-3 – Compulsory Automobile Insurance Coverage; Limits
3
Justia. New Jersey Code 39-6A-3.1 – Election of Basic Automobile Insurance Policy; Coverage Provided
4
New Jersey Department of Banking and Insurance. Standard Auto Insurance Policy
5
New Jersey Department of Banking and Insurance. New Jersey’s Basic Auto Insurance Policy
6
New Jersey Department of Banking and Insurance. 2026 Auto Insurance Buyer’s Guide
7
Justia. New Jersey Code 39-6A-4 – Personal Injury Protection Coverage; Benefits
8
FindLaw. New Jersey Statutes Title 17 – 17:28-1.1
9
Justia. New Jersey Code 39-6A-8 – Tort Option
10
Justia. New Jersey Code 39-3-29 – License, Registration Certificate and Insurance Identification; Possession; Exhibit Upon Request; Violations; Fine
11
New Jersey Motor Vehicle Commission. Insurance Requirements
12
New Jersey Department of Banking and Insurance. New Jersey Administrative Code 11-3-6 – Insurance Identification Cards
13
Justia. New Jersey Code 39-6B-2 – Penalties
14
New Jersey Motor Vehicle Commission. Surcharges