New Jersey requires all drivers to carry auto insurance, but it’s not a one-size-fits-all system. The state uses a “choice no-fault” model, which means drivers must select between a limited or unlimited right to sue when buying coverage. Minimum policy limits are mandated by law, but optional add-ons can significantly affect protection and legal options after an accident.
This page explains New Jersey’s car insurance requirements, policy options, and how your choices can impact a potential car accident claim.
Why Choose Nagel Rice LLP After an Insurance Dispute or Injury?
Car insurance is supposed to protect you—but that doesn’t mean insurers make it easy to get what you’re owed. When a crash happens or a claim is denied, you need legal advocates who understand New Jersey’s complex insurance laws and how to hold carriers accountable.
Clients choose Nagel Rice LLP because:
- We have decades of experience with personal injury and insurance litigation in New Jersey.
- Our team understands the legal impact of PIP, coverage thresholds, and fault-based claims.
- We negotiate with insurance companies and go to trial when necessary.
- We help injured drivers pursue compensation when policies or coverage limits fall short.
If you’ve been in a car accident or need guidance about your car insurance rights, contact us today for a free consultation.
What Types of Car Insurance Are Required in New Jersey?
New Jersey law requires all drivers to carry auto insurance, but there are two types of policies drivers can choose from:
1. Standard Policy
This option offers flexible coverage choices and higher liability limits.
Minimum required coverage includes:
- Bodily Injury Liability: $25,000 per person / $50,000 per accident
- Property Damage Liability: $25,000 per accident
- Personal Injury Protection (PIP): At least $15,000 per person
Uninsured/Underinsured Motorist Coverage: Optional but recommended
Policyholders must also choose between:
- Limited right to sue (lawsuit threshold applies)
- Unlimited right to sue (allows claims for pain and suffering regardless of injury severity)
2. Basic Policy (Low-Cost Option)
This is a more affordable but limited policy option, usually for younger or high-risk drivers.
Basic policies include:
- Property Damage Liability: $10,000
- PIP: $15,000 per person (up to $250,000 for certain serious injuries)
- Bodily Injury Liability: Not included by default (can add $10,000 total per accident)
- No right to sue for non-economic damages unless the limited threshold is met
What Is Personal Injury Protection (PIP) and How Does It Work?
New Jersey is a no-fault state, which means your own PIP coverage pays for your medical expenses after an accident—no matter who caused the crash.
PIP covers:
- Emergency medical treatment
- Surgery and hospitalization
- Rehabilitation and follow-up care
- Lost income (partial reimbursement)
- Essential services (like household help)
However, PIP does not cover pain and suffering, and in most cases, you can only pursue those damages by stepping outside the no-fault system—if your policy and injuries meet legal requirements.
What’s the Difference Between the Limited and Unlimited Right to Sue?
This is one of the most important decisions you make when selecting a policy:
Limited Right to Sue (Verbal Threshold)
- You can only sue the at-fault driver for non-economic damages (like pain and suffering) if your injury meets the legal threshold.
- Qualifying injuries include:
- Death
- Dismemberment
- Significant disfigurement or scarring
- Displaced fractures
- Loss of a fetus
- Permanent injury (medically certified)
Unlimited Right to Sue
- You can file a lawsuit for pain and suffering after any accident-related injury—no threshold required.
- Premiums are typically higher but offer greater legal protection.
Your right to file a personal injury lawsuit depends heavily on which option you selected when purchasing your policy.
What Happens If You Don’t Have the Required Insurance?
Driving without insurance in New Jersey is a serious offense. If you’re uninsured:
- You may face fines, license suspension, and vehicle impoundment
- You may be barred from recovering non-economic damages in a personal injury lawsuit
- Others can still sue you if you’re at fault in a crash
Also, uninsured drivers are not entitled to PIP benefits and may have to pay for medical treatment out of pocket.
When to Talk to an Attorney About Insurance Coverage
Car insurance decisions can affect your health, finances, and legal rights long after a crash. If your injuries are serious or your claim has been denied, legal help can make the difference between a dismissed case and a full recovery.
At Nagel Rice, we represent accident victims, insurance claimants, and families navigating New Jersey’s auto coverage laws. If you’re dealing with a complex claim, a coverage dispute, or an injury that raises questions about your right to sue, we’re here to help. Contact us today to speak with an experienced car accident attorney.
Frequently Asked Questions
Can I choose higher coverage limits than New Jersey’s minimum requirements?
Yes. While the state sets minimum insurance requirements, you are allowed—and often encouraged—to select higher coverage limits for better protection. Higher limits can help cover medical bills, lost wages, and legal claims if you’re found at fault in a serious accident.
What happens if an uninsured driver hits me in New Jersey?
If you carry uninsured motorist (UM) coverage—which is optional under the standard policy—you may be able to file a claim with your own insurer. This coverage helps pay for injuries and property damage when the at-fault driver has no insurance or leaves the scene.
Does my out-of-state insurance policy meet New Jersey’s requirements?
Not necessarily. If you move to New Jersey or keep your car here long-term, you must register your vehicle and obtain insurance that complies with New Jersey law. Out-of-state policies may not meet minimum liability or PIP requirements and could leave you uninsured in the event of a crash.