New Jersey car accident laws start from one central rule: this is a no-fault state, so your own auto policy pays your medical bills after a crash regardless of who caused it. That single feature drives everything else — the coverage you must carry, whether you can sue the other driver for pain and suffering, how quickly you have to report, and how fault gets divided when money is at stake. Getting any of these wrong has real financial consequences.
Insurance You Are Required to Carry
Every registered vehicle in New Jersey must be insured, and drivers pick between two very different policy structures.
The Basic Policy
The Basic Policy is the bare minimum. It provides $15,000 in personal injury protection (PIP) per person per accident and $5,000 in property damage liability.1New Jersey Department of Banking and Insurance. Consumer Information – New Jersey’s Basic Auto Insurance Policy It carries no bodily injury liability coverage by default, though a $10,000 per-accident bodily injury add-on is available. It also excludes uninsured and underinsured motorist coverage. If an uninsured driver hits you, your only recovery comes from your own PIP benefits.
Basic Policy holders are locked into the “limitation on lawsuit” option, which sharply restricts the right to sue for pain and suffering.
The Standard Policy
The Standard Policy provides broader protection. Minimum limits are $35,000 per person and $70,000 per accident in bodily injury liability, and $25,000 in property damage liability.2New Jersey Department of Banking and Insurance. Consumer Information – Standard Auto Insurance Policy PIP starts at $15,000 and can be selected at $50,000, $75,000, $150,000, or $250,000. If you don’t affirmatively pick a PIP level, it defaults to $250,000.3Justia. New Jersey Code 39:6A-4.3 – Personal Injury Protection Coverage Options
Uninsured and underinsured motorist (UM/UIM) coverage is mandatory. For policies issued or renewed on or after January 1, 2026, minimum UM/UIM limits are $35,000 per person and $70,000 per accident for bodily injury.4Justia. New Jersey Code 17:28-1.1 – Required Coverages Standard Policy holders also choose between the two lawsuit options described below.
Whether You Can Sue for Pain and Suffering
This is one of the most consequential choices in a New Jersey auto policy, and many drivers don’t understand what they picked. The two options are:
- Limitation on lawsuit (verbal threshold). You cannot sue for pain and suffering unless your injuries fit one of six categories: death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury that will not heal to function normally with further treatment.5Justia. New Jersey Code 39:6A-8 – Tort Exemption; Limitation on the Right to Noneconomic Loss
- No limitation on lawsuit (zero threshold). You can sue for pain and suffering from any injury, with no minimum severity requirement.
The verbal threshold costs less in premium, which is why so many drivers pick it. The trade-off comes when soft-tissue injuries like whiplash or chronic back pain don’t clearly qualify as “permanent.” In those cases, you’re limited to PIP with nothing recoverable for pain, lost quality of life, or emotional harm. Basic Policy holders cannot upgrade out of the verbal threshold.
Reporting a Crash
Any driver in a crash causing injury, death, or property damage over $500 must notify local police, county police, or the State Police by the quickest means available.6Justia. New Jersey Code 39:4-130 – Immediate Notice of Accident; Written Report If law enforcement does not investigate, you must submit a written report to the New Jersey Department of Transportation within 10 days using the SR-1 Self-Reporting Crash Form.7New Jersey Motor Vehicle Commission. New Jersey Motor Vehicle Accident Report Missing the filing can result in suspension of both your driving and registration privileges.
p>Notify your own insurance company promptly as well. Most policies require notice within a few days, and delays can complicate the claim or lead to a coverage denial. At the scene, gather what you can safely: photographs of the vehicles and road conditions, witness contact information, and the other driver’s insurance details.
How Fault Affects What You Can Recover
New Jersey applies modified comparative negligence. You can recover from another driver as long as your share of fault does not exceed theirs. If two drivers are each 50% at fault, both can recover. If you’re 51% or more responsible, you get nothing.8Justia. New Jersey Code 2A:15-5.1 – Contributory Negligence; Comparative Negligence to Determine Damages
Whatever percentage of fault is assigned to you reduces your recovery by that amount. Thirty percent fault in a $100,000 case brings the award down to $70,000. Insurers assign fault percentages based on police reports, witness accounts, traffic violations, and road conditions.9Department of Banking and Insurance. Auto Comparative Negligence Settlement FAQs You can challenge the determination, but the burden of producing evidence is on you.
This is where most fights happen. The other driver’s insurer has every reason to push your share above 50%, because that number wipes out their liability. Thorough scene documentation and getting the police report early make a real difference.
Deadlines to File a Claim
A missed deadline in New Jersey can permanently kill a good claim.
Personal Injury and Property Damage
Personal injury claims must be filed within two years of the accident. For a minor, the clock doesn’t start until age 18, giving them until 20 to file. Property damage claims carry a six-year window.
Wrongful Death
A wrongful death lawsuit must be filed within two years of the date of death rather than the date of the accident, though they’re often the same day.10Justia. New Jersey Code 2A:31-3 – Limitation of Actions; Exceptions Only the executor of the deceased person’s estate or a court-appointed administrator can bring the claim.
Claims Against Government Entities
If a government vehicle or a poorly maintained public road caused the crash, the deadline is dramatically shorter. Under the Tort Claims Act, you must file a formal notice of claim within 90 days of the accident.11Justia. New Jersey Code 59:8-8 – Time for Presentation of Claim A court may allow a late notice up to one year after the accident, but only if the public entity has not been substantially prejudiced by the delay.12Justia. New Jersey Code 59:8-9 – Notice of Late Claim After two years, the claim is barred regardless of circumstances.
Leaving the Scene
Fleeing a crash is treated far more seriously than many drivers realize. When the accident involves injury or death, a driver who knowingly leaves faces a $2,500 to $5,000 fine, up to 180 days in jail, and a mandatory one-year license forfeiture on a first offense.13Justia. New Jersey Code 39:4-129 – Action in Case of Accident A second conviction triggers a permanent loss of driving privileges in New Jersey.
Leaving the scene of an accident causing serious bodily injury is also a separate third-degree crime carrying three to five years in prison.14Justia. New Jersey Code 2C:43-6 – Sentence of Imprisonment for Crime When a driver is convicted of both the traffic offense and the criminal charge, the prison sentences run consecutively rather than concurrently. The law also removes the usual presumption against imprisonment, so judges are expected to impose jail time.
Driving Without Insurance
A first offense carries a $300 to $1,000 fine and court-ordered community service.15Justia. New Jersey Code 39:6B-2 – Penalties A second conviction jumps to up to $5,000 in fines, 14 days of mandatory imprisonment, 30 days of community service, and a discretionary license suspension of up to two years.
Failing to produce your insurance identification card at a traffic stop or accident investigation creates its own problem, even if you are actually insured. Carry the card whenever you drive.
Criminal Charges After Serious Crashes
When a crash involves recklessness, impairment, or extreme disregard for safety, the case moves out of traffic court and into the criminal system.
Vehicular Homicide
Causing a death through reckless driving is reckless vehicular homicide, a second-degree crime.16Justia. New Jersey Code 2C:11-5 – Death by Auto or Vessel14Justia. New Jersey Code 2C:43-6 – Sentence of Imprisonment for Crime17Justia. New Jersey Code 2C:43-3 – Fines and Restitutions If the driver was intoxicated and the death occurred in a school zone or school crossing, the charge rises to a first-degree crime carrying 10 to 20 years in prison and fines up to $200,000.
Driving Under the Influence
Operating a vehicle with a BAC of 0.08% or higher is a serious traffic offense.18Justia. New Jersey Code 39:4-50 – Driving While Intoxicated All first-time offenders must now install an ignition interlock device, with the length of the requirement tied to the driver’s BAC.19New Jersey Courts. New Law Regarding Ignition Interlock Device Repeat offenders face longer license forfeitures and mandatory jail time.
Assault by Auto
When reckless driving injures another person, the driver can be charged with assault by auto. The grading depends on the conduct and the injuries:
- Reckless driving causing serious bodily injury: fourth-degree crime, up to 18 months in prison.
- DUI causing bodily injury: fourth-degree crime, up to 18 months in prison.
- DUI causing serious bodily injury: third-degree crime, three to five years in prison.
- DUI in a school zone causing serious bodily injury: second-degree crime, five to 10 years in prison.
These distinctions come from the same statute, and the penalties track the sentencing ranges for each crime degree.20Justia. New Jersey Code 2C:12-1 – Assault14Justia. New Jersey Code 2C:43-6 – Sentence of Imprisonment for Crime “Serious bodily injury” means an injury that creates a substantial risk of death or causes permanent disfigurement or long-term impairment of an organ or body part.
Attorney Fees and Taxes on a Settlement
New Jersey caps personal injury attorney contingency fees through a sliding scale under Court Rule 1:21-7: 33⅓% on the first $500,000 recovered, 30% on the next $500,000, 25% on the next $500,000, and 20% on the next $500,000. Recoveries beyond $2 million require a petition to the court for a reasonable fee. If the injured person was a minor or mentally incapacitated at the time of the fee agreement, the fee on any amount recovered by settlement without trial cannot exceed 25%.
Federal tax law excludes damages received for personal physical injuries or physical sickness from gross income, whether obtained by settlement or verdict.21Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness That covers medical expenses, pain and suffering, disfigurement, and lost enjoyment of life tied to the physical injury, along with emotional distress damages that flow from it. Two categories remain taxable no matter what: punitive damages are taxed as ordinary income, and any interest that accrues on the settlement is taxed as interest income. If your settlement mixes compensatory and punitive amounts, how the agreement allocates between them affects your return.