What changed on January 1, 2026
New Jersey is phasing in higher minimum limits under P.L. 2022, c.87. The first phase, effective January 1, 2023, raised bodily injury minimums to $25,000 per person and $50,000 per accident. The second phase took effect January 1, 2026 and applies to every new and renewal policy: bodily injury minimums rise to $35,000 per person and $70,000 per accident, while property damage stays at $25,000.
| Coverage | 2023 phase | 2026 phase (current) |
|---|---|---|
| Bodily injury liability | $25,000 / $50,000 | $35,000 / $70,000 |
| Property damage liability | $25,000 | $25,000 (unchanged) |
| Uninsured/underinsured motorist | Tied to bodily injury minimums | Rises with the new bodily injury minimums |
| PIP (Standard policy) | $250,000 default | $250,000 default (unchanged) |
Insurers were required to notify named insureds whose policy limits would fall below the new floors, and to make the increase without requiring a signed coverage selection form. If you have not shopped New Jersey coverage since the phase-in, your renewal now carries numbers you never chose.
Basic policy versus Standard policy
New Jersey is the rare state where the law lets you buy two genuinely different products. The Standard policy is what most households carry: full coverage structure, required UM/UIM protection, and the election between full and limited tort rights. The Basic policy is a stripped-down option that meets the legal minimums at the lowest price - and the 2023 and 2026 minimum increases do not apply to it.
| Feature | Basic policy | Standard policy |
|---|---|---|
| Liability minimums | Lower legacy floor applies | $35,000 / $70,000 / $25,000 from 2026 |
| PIP | Limited PIP benefits | $250,000 default, lower limits electable in writing |
| Uninsured motorist | Not included | Required minimums |
| Right to sue | Restricted | Full tort or limited tort election |
| Best for | Meeting the legal floor cheaply | Most drivers, especially with assets or a family in the car |
The Basic policy's savings are real but its limits are thin: no UM coverage, low PIP, and liability that can be exhausted by one serious crash. It is designed for minimum legal compliance, not protection.
PIP: the $250,000 default and the significant-injury floor
On a Standard policy, PIP defaults to $250,000 per person unless you affirmatively elect a lower limit in writing - $150,000, $75,000, $50,000 or $25,000 options exist for drivers with health coverage that absorbs accident injuries. PIP pays medical treatment, lost earnings and essential services regardless of fault.
New Jersey builds in a safety rail the other option states lack: even on a reduced PIP limit, medically necessary treatment for certain permanent or significant injuries can be covered up to $250,000 regardless of your selected limit, with amounts drawn down from your chosen ceiling. New York's neighbor learned to write a floor under the floor.
The right to sue and direct claims
Standard policies carry a tort election. Limited tort (the default savings option) restricts your ability to sue for pain and suffering to injuries meeting the statutory threshold - death, loss of limb, permanent and serious disfigurement or limitation, and similar categories. Full tort restores the unrestricted right to sue, at a higher premium, and the choice can be changed at renewal.
For economic losses, New Jersey drivers sue insurers directly rather than the other driver - the direct-action feature of its no-fault system. Uninsured driving carries heavy consequences here: New Jersey suspends your license and registration for driving without insurance, and reinstatement is neither fast nor free.
What New Jersey drivers pay
New Jersey has historically ranked at or near the top of national tables for minimum-coverage premiums, though the state's dense carrier market means the spread between the cheapest and most expensive quote for the same driver is unusually wide. Shopping is the single biggest lever, followed by the deductible and tort elections most drivers never revisit.
- Re-shop every renewal - New Jersey's carrier field is competitive and slow-moving rates reward switching.
- Price the tort election deliberately: full tort costs more but preserves pain-and-suffering rights.
- Match PIP to your health coverage rather than carrying duplicate medical coverage at full price.
- Ask about the defensive driving discount, low-mileage credits, and telematics programs.
- Raise comp and collision deductibles in steps you could actually pay after a claim.
Related pages
- Auto insurance in New York
- Supplemental life insurance
- How to get the cheapest car insurance rates
- Liability limits: how much you need
- Auto insurance hub
Frequently Asked Questions
What are New Jersey's car insurance minimums in 2026?
$35,000 bodily injury per person, $70,000 per accident, and $25,000 property damage per accident on Standard policies issued or renewed on or after January 1, 2026, plus required UM/UIM and PIP with a $250,000 default limit.
What is the difference between a Basic and Standard policy?
The Basic policy meets legal requirements at the lowest cost with limited PIP, no uninsured motorist coverage, and lower liability floors that the 2026 increases do not touch. The Standard policy carries the new minimums, required UM/UIM, higher PIP defaults, and the tort election.
Can I lower my PIP limit in New Jersey?
Yes - Standard policyholders may elect lower PIP limits in writing when health coverage absorbs accident injuries. Note that certain permanent or significant injuries are still covered up to $250,000 even on reduced limits, drawn down from your chosen ceiling.
What is limited tort?
The restricted right to sue for pain and suffering, available only for injuries meeting New Jersey's serious-injury threshold. Full tort restores unrestricted sue rights for a higher premium, and you can change the election at renewal.
What happens if I drive uninsured in New Jersey?
License and registration suspension, plus fines and reinstatement costs. The state enforces insurance electronically, so a lapse shows up quickly.
Last updated: 2026-10-01