NJ Uninsured Motorist Statute: Coverage, Claims, Penalties

New Jersey’s uninsured motorist statute, N.J.S.A. 17:28-1.1, requires every standard auto insurance policy sold in the state to include coverage that pays you when a driver with no insurance causes your accident. For policies issued or renewed on or after January 1, 2026, the minimum limits are $35,000 per person and $70,000 per accident for bodily injury, plus $25,000 for property damage.¹ These are floors. You can buy more, and if you drive in New Jersey, you probably should.

What the Statute Requires on a Standard Policy

Every standard automobile liability policy issued or renewed in New Jersey must carry both uninsured motorist (UM) and underinsured motorist (UIM) coverage. No standard policy can be issued without them. The 2026 minimums are:

$35,000 bodily injury per person
$70,000 bodily injury per accident
$25,000 property damage aggregate across all insurers in a single accident, with a $500 deductible per insured

Your insurer must offer you UM and UIM limits that match your liability coverage. If you want lower UM/UIM limits than your liability limits, you have to reject the higher amount in writing.¹

Property damage coverage under a UM claim comes with two restrictions worth knowing before you file. First, the $500 deductible is yours to absorb. Second, property damage coverage applies only when the uninsured driver is identified. Hit-and-run property damage is excluded, because without the other driver there is no way to verify their insurance status, and the legislature treated that as too open to fraud.¹

The Basic Policy Has No UM Coverage at All

New Jersey also allows a stripped-down product called the basic automobile insurance policy. If that is what you carry, you have no uninsured or underinsured motorist coverage. None. The basic policy provides $15,000 in personal injury protection medical benefits, $5,000 in property damage liability, and an optional $10,000 in bodily injury liability, and that is the entire package.²

If an uninsured driver hits you while you carry a basic policy, your only avenues are your PIP medical benefits and a direct lawsuit against the at-fault driver, who almost by definition has no assets worth collecting. The basic policy also locks you into the limitation on lawsuit threshold described below.³ Check your declarations page before you assume the mandate protects you.

Who the Coverage Protects

UM coverage reaches well beyond the person who pays the premium.

The named insured on the declarations page.
Family members who live in the same household, whether or not they were in the car.
Passengers riding in the insured vehicle at the time of the accident.
Pedestrians struck by an uninsured or hit-and-run vehicle, through their own policy or a household member’s policy.

The household rule means a teenager at home is covered under a parent’s policy, and a spouse is covered even if only one partner is named.¹

Underinsured Motorist Coverage and the Gap Method

UIM coverage applies when the at-fault driver has insurance but not enough. Two conditions have to be met: the at-fault driver’s bodily injury liability limit must be lower than your UIM limit, and your total damages must exceed what the at-fault driver’s insurance pays.

New Jersey uses the gap method. Your insurer pays the difference between the at-fault driver’s liability limit and your UIM limit, not an amount on top of it. Say the at-fault driver carries $35,000 in liability and your UIM limit is $100,000. The most your UIM coverage will pay is $65,000. If your damages come to $50,000, you collect $35,000 from the at-fault driver’s insurer and $15,000 from your UIM.

The math creates a trap for anyone carrying only the state minimum. If you and the at-fault driver both have $35,000/$70,000 policies, the offset wipes out your UIM entirely, because there is no gap. The only way UIM actually works for you is to carry limits meaningfully higher than the state minimum.

Consent to Settle

Before you accept a settlement from the at-fault driver’s insurer in a UIM scenario, notify your own insurer and get written permission. Most policies require it, and skipping the step can jeopardize your UIM benefits because your insurer has subrogation rights it needs to protect.⁴

No Stacking

New Jersey prohibits stacking of UM and UIM limits. You cannot combine the limits across multiple vehicles on the same policy, and you cannot stack limits from separate policies. When more than one policy applies, your recovery is capped at the highest single limit among them, and the payout is prorated across the applicable coverages.¹

What You Can Recover

A UM claim is meant to put you where you would have been if the at-fault driver had carried proper insurance. The categories of recovery are:

Medical expenses: hospital bills, surgery, physical therapy, medication, and ongoing treatment tied to the accident.
Lost wages: income you missed during recovery, including reduced earning capacity for longer-term injuries.
Pain and suffering: physical pain and emotional distress, subject to the verbal threshold described below.
Property damage: vehicle repair or replacement, subject to the $500 deductible and the $25,000 aggregate limit, and not available for hit-and-run claims.

Your recovery is capped at the UM limits on your own policy. If you carry the $35,000/$70,000 minimum and your damages exceed it, you absorb the rest.¹

The Verbal Threshold Can Block Pain and Suffering

When you buy auto insurance in New Jersey, you choose between the limitation on lawsuit option (the verbal threshold) and the no limitation on lawsuit option (the zero threshold). Most drivers pick the verbal threshold because the premium is lower.

Under the verbal threshold, you can recover pain and suffering only if your injuries meet one of the categories listed in N.J.S.A. 39:6A-8: death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury that has not healed and will not heal to function normally with further treatment. Soft tissue injuries that resolve generally do not clear the bar.

Under the zero threshold, you can pursue pain and suffering for any injury the uninsured driver caused, with no severity gate. The choice matters in UM claims because your economic damages may be modest while the disruption to your life is substantial, and the verbal threshold can shut off the second category entirely.

Filing a UM Claim

You file a UM claim with your own insurance company, because the at-fault driver has none. Pull together:

The police report, with its report number, establishing date, time, location, and parties.
Proof of the other driver’s uninsured status, which your insurer will typically confirm through state records or by contacting the other driver’s alleged carrier.
Medical records: treatment notes, diagnostic imaging, discharge summaries, and bills tying your injuries to the accident.
Income documentation: pay stubs, tax returns, or an employer letter showing wages lost during recovery.

Submit through your carrier’s claim process. Once your insurer has your claim, it must begin investigating within 10 working days. For bodily injury claims, it has 90 calendar days from receiving notice to make a settlement offer or explain a denial.⁵

Notify your insurer as soon as you can after the accident. Most policies include a prompt notice clause, and a long delay gives the insurer grounds to argue it was prejudiced. New Jersey courts generally require the insurer to show actual prejudice before denying on late notice alone, but that is a fight to avoid.

Deadlines You Cannot Miss

New Jersey’s general statute of limitations for contract-based claims is six years under N.J.S.A. 2A:14-1(a), and because a UM claim rests on your insurance contract, that six-year window generally applies from the accident date. Your policy may contain a shorter period. Some require any action or arbitration demand within four years, or within one year of discovering a UIM claim, whichever is later. Pull your policy and read the limitations language. Miss the applicable deadline and you lose the right to recover, with no exceptions.⁴

Arbitration When You Disagree With Your Insurer

When you and your insurer disagree about what your UM or UIM claim is worth, the statute directs you to arbitration. The specific terms, including whether the result is binding, come from your policy, which must be approved by the Commissioner of Banking and Insurance.¹ A neutral arbitrator or panel reviews the evidence and decides the value. Check your declarations and endorsements to see whether your clause makes the decision binding. Many New Jersey auto policies use binding arbitration for UM disputes, which means the award is final.

Penalties for Driving Without Insurance

A first offense for operating without the required liability coverage carries a fine between $300 and $1,000, plus community service. The court may suspend the driver’s license for up to one year, but the suspension is discretionary, and a judge can reduce or waive it if the driver shows proof of insurance at the hearing. A second or subsequent offense brings fines up to $5,000, a mandatory 14-day jail sentence, 30 days of community service, and a discretionary license suspension of up to two years.⁶ Because the first-offense suspension is discretionary, actual outcomes vary by municipality.

1
Justia. New Jersey Code 17:28-1.1 – Required Coverage; Exceptions
2
NJ Department of Banking and Insurance. Consumer Information – New Jersey’s Basic Auto Insurance Policy
3
Justia. New Jersey Code 39:6A-3.1 – Election of Basic Automobile Insurance Policy
4
NJ Department of Banking and Insurance. Filing an Uninsured/Underinsured Motorist Claim
5
Legal Information Institute. New Jersey Administrative Code 11:2-17.7 – Rules for Prompt Investigation and Settlement of Claims
6
Justia. New Jersey Code 39:6B-2 – Penalties