New Jersey Car Insurance Laws

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New Jersey automobile owners may disagree about speed limits, traffic rules, and driving policies—but there is one thing all drivers can agree on. When it comes to lapsed insurance, New Jersey laws are strict. Like most states, New Jersey has minimum insurance requirements, and it is against the law to drive without meeting them.

Residents of New Jersey do have insurance package options that make buying car insurance more affordable. Drivers can choose from minimum coverage or more comprehensive insurance policies. It helps to know what you are required to have while understanding the downfalls of purchasing only minimum coverage so that you can make the best decision.

How Much Insurance Do New Jersey Drivers Need?

Every motor vehicle should, according to New Jersey law, have at least a minimum amount of liability coverage. This provides coverage for such things as property damage and bodily injury. There are two types of policies in New Jersey, the standard and basic.

Standard Policy

Minimum bodily injury coverage for any one person must be at least $15,000 per person per accident or $30,000 per accident; personal injury has a minimum of $15,000 as well. The insurance must include no less than $5,000 for property damage in a single crash.

Basic Policy

This policy offers much lower payments while meeting minimum coverage requirements with $10,000 per person per accident available for bodily injury, and $15,000 per person per accident for personal injury coverage.

The state of New Jersey has warned that the Basic Policy, while meeting minimum requirements, is best for residents with few assets to protect and few family responsibilities. In other words, there is a good chance you'll end up paying for repairs and medical costs for those injured if you are found to be at fault.

While this is the minimum coverage necessary, it doesn’t make it the recommended coverage. All drivers should consider purchasing more comprehensive car insurance policies if they can afford to do so—otherwise, they may not be covered in many scenarios, which could raise expenses very quickly if liabilities are more than their minimums.

Penalties for Driving Without Insurance

New Jersey imposes severe and strict penalties on those who drive without insurance. Consequences can include fines, surcharges, suspended driver's licenses, and unpaid community service. Plus, insurance points are imposed, which can significantly add to the cost of car insurance.

Why People Allow Insurance to Lapse

There are many reasons that car insurance is allowed to lapse, but for most people, the reasons can be broken down into one of about three different categories. One, some drivers find themselves in circumstances where they simply run out of money to pay for insurance. Two, people can forget to pay their monthly premiums.

Three, the automobile may have broken down or been involved in an accident—making it undrivable, which sometimes leads to drivers letting their insurance lapse.


If the lapse is due to oversight or because of a lack of funds, there is a good chance that you might still be driving the vehicle. It is illegal to drive a vehicle without coverage in every state, and police officers have access to insurance information because most states require insurance companies to report lapses in coverage—if an officer runs your plates while following you, you will be pulled over for driving without insurance.

It is wise to continue coverage even if your vehicle is out of commission and you cannot pay the repairs right away—many insurance companies will work with owners of vehicles in these situations.

If you are caught driving without insurance, you can face severe penalties that are more costly than paying your premiums. Besides fines, other penalties may also be imposed. Also, this adds insurance points which make the cost of your insurance policy more expensive.

If you’ve forgotten to pay your insurance premiums, you should consider setting up auto-pay with your bank—sometimes you’ll even get a discount for doing so. You could also set a monthly calendar reminder on your computer, phone, or tablet so that you’ll never miss a payment.

Wrapping It Up

Car insurance is an absolute requirement for New Jersey residents. You shouldn't take any chances; keep things legal for yourself, and understand that car insurance is not meant to only cover you and your car, it is designed to ensure the other people affected by an accident are taken care of.

Determine the maximum coverage you can afford—then decide which package will work best for your specific set of circumstances. Different insurance companies offer different prices, so taking the time to do online comparison shopping is always worthwhile.

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Article Sources

  1. State of New Jersey Department of Banking & Insurance. "Get Legal with New Jersey's Basic Auto Insurance Policy." Accessed June 3, 2020.