Featured Expert
Gary Poedubicky
Gary Poedubicky N.J. Division of Highway Traffic Safety View bio

It may be better known for its turnpikes and crowded bridges, but New Jersey is actually a great place for a quiet drive in the countryside or woods. Wherever you drive in the Garden State, you’ll need insurance, something that more than 10 percent of New Jersey drivers went without in 2012. Read on to learn more about insurance laws and other rules of the road for New Jersey residents.

New Jersey Vehicle Insurance Requirements

Summary

The most densely populated state in the country is also one of the safest for drivers. The rate of fatal highway crashes in New Jersey is nearly a third less than the national average. But uninsured drivers are still a problem—one that the state is trying to address through increased monitoring.

Who Needs Vehicle Insurance in New Jersey?

All motor vehicle owners in New Jersey must have insurance to legally operate a vehicle on state roads.

Proof of Insurance

All drivers must show proof of insurance when registering a car or truck with the New Jersey Motor Vehicle Commission or when stopped by a police officer. Failure to show proof of insurance can lead to driver’s license suspension and revoked registration. Proof of insurance can consist of:

  • An insurance card
  • A photocopy of the policy’s declaration page
  • An electronic image of the insurance card on a smart phone.

Minimum Car Insurance Requirements in New Jersey

New Jersey law has some of the lowest requirements for liability insurance in the country, but it also requires personal injury protection. Drivers can select between a basic policy that offers very little liability protection and a standard policy that offers more.

Drivers accepting the basic policy must carry at least this minimum auto insurance coverage:

  • No required liability insurance to cover injuries to people in another car (although $10,000 for all injured parties is available as an option)
  • $5,000 liability protection for property damage
  • $15,000 in personal injury protection (PIP) per person, per accident
  • Up to $250,000 for certain injuries, such as spinal cord damage

With a standard policy, you have to get a minimum of:

  • $15,000 of bodily injury liability insurance per person, per accident.
  • $30,000 of everyone injured in an accident
  • $5,000 of property damage liability
  • $15,000 of personal injury protection in a car accident
  • Up to $250,000 of personal injury protection for severe or permanent injuries

If you choose the standard policy, you also have to check a box choosing between an unlimited or limited right to sue. If you do not make a choice, the state insurance department warns that you may have only a limited right to sue following a car accident.

What Happens If You Drive Without Car Insurance in New Jersey?

Penalties for driving without insurance in New Jersey include:

  • A minimum $300 fine
  • Loss of your driver’s license for up to a year
  • Suspended vehicle registration
  • Court-ordered community service
  • A surcharge of $250 annually for three years

All fines and fees must be paid, and proof of insurance provided before your driver’s license will be reinstated. New Jersey deposits fees and fines from auto insurance violations into the state’s uninsured motorist prevention fund.

How Much Vehicle Insurance Do You Need?

If you can afford, experts advise that you get much higher liability coverage than what the state requires.

What Percentage of Drivers in
New Jersey Lack Vehicle Insurance?
10.3% National Average: 12.6 %

Consumer and insurance experts recommend liability coverage of $100,000 per injury and $300,000 per accident.

You may also want to consider comprehensive and collision insurance to protect your car, as well as uninsured motorist in case you’re hit by a driver without insurance.

For more on the types of auto coverage that’s right for you, see the MoneyGeek guide to car insurance.

Low-cost auto insurance program

Car insurance can be expensive, especially if you don’t have a well-paying job. Local Motor Vehicle Commission offices can provide information on New Jersey’s auto insurance program for low-income residents. Known as the Special Automobile Insurance Policy (SAIP), the initiative makes limited auto insurance coverage available to drivers who are eligible for federal Medicaid with hospitalization. These drivers can obtain a medical coverage-only policy at a cost of $365 a year.

Car Insurance and Special Groups

Teen Drivers in New Jersey

As a parent or guardian in New Jersey, you’re responsible for supervising your teen driver. When your teen gets her own car, she’ll need to meet the legal requirements for insurance in the state.

In the meantime, it’s probably cheaper to add her to your policy. The New Jersey Department of Insurance suggests helping your teen comparison shop for insurance, and — if you’re adding her to your policy — lower your premium by raising your deductible.

New Jersey Car Insurance Premiums: The Difference a Teen Makes

Median annual price change for families with a teen driver on their policy:

$2,332 increase This is a difference of 108%.
Comparison of Premium Ranges
25th - 75th Percentile Median
Teen Speeding and Insurance

Average annual premium increase if a teen gets a speeding ticket for driving 11 to 15 mph above the speed limit:

Male teen

$1,223

Speedometer
Female teen

$992

New Jersey Discounts: How Much Teens Save

Impact on annual premium with Good Student and Defensive Driving discounts:

$547 saved

How New Jersey Insurer Premiums Compare

Talk with more than one insurer. Check out the annual average premiums, for example, for a married couple with a 16-year-old teen driver in New Jersey:

Insurance Provider Min MEDIAN MAX
New Jersey Manufacturers $1,600 $3,183 $7,578
GEICO $2,169 $4,261 $9,957
Allstate $2,288 $5,398 $12,550
State Farm $2,416 $6,148 $14,198
Progressive $2,308 $6,538 $17,676

Car Choices for Teens: Impact on New Jersey Premiums

Data shows that sedans, minivans and other 'family cars' are safer choices for teen drivers, and premium rates reflect that.

Average premium for two 2014
Mustang GTs

$6,901

Average premium for two 2008
Town and Country Limiteds

$4,385

Annual benefit of minivans:

$2,516 saved This is 36% less expensive.
Premium Comparison for Two Adults + 16 Year Old
25th - 75th Percentile Median

College Students in New Jersey

If you’re an out of state student attending a New Jersey school, you don’t need a New Jersey license while you’re in college.

If you’re a New Jersey resident attending college in a different state:

Always let your insurance agent know if you’ll be using the car in another state for more than 30 days a year.

Think twice before loaning a car to friends. New Jersey holds the vehicle owner liable for damages if the driver isn’t insured or doesn’t have enough coverage.

New Jersey College Students vs. Teen Drivers

Median annual premium change with a college student vs. high school driver

$1,239 decrease This is a decrease of 25%.
Comparison of Premium Ranges
25th - 75th Percentile Median

How a College Student Affects Your New Jersey Rates

Each year, look at your policy before it renews to see whether you could get a better rate. Case in point: Here are the average premiums for a married couple with a 19-year-old college student in New Jersey.

Provider Min MEDIAN MAX
New Jersey Manufacturers $1,015 $2,148 $5,286
GEICO $1,382 $3,050 $8,003
State Farm $2,002 $4,589 $8,180
Progressive $1,824 $4,744 $10,732
Allstate $2,452 $4,874 $10,832

Surprising Driver Discount for New Jersey College Students

You may see a slight savings in your family’s premium if your student moves 150+ miles away from home.

Average premium for a 19-year-old male
  • $4,712 at home
  • $3,753 at school
  • $959 in savings
Average premium for a 19-year-old female
  • $4,161 at home
  • $3,529 at school
  • $632 in savings

How Your Car Can Affect Your Insurance Rates in New Jersey

A college student driving a minivan will cost less than if he or she drives a sports car — a vehicle insurers associate with speeding.

2014 Mustang GTs (2)

$5,266

2008 Town and Country Limited minivans (2)

$3,312

Annual benefit of minivans

$1,954 saved This is 37% less expensive.
Premium Comparison for Two Adults + College Driver
25th - 75th Percentile Median

Military Drivers in New Jersey

New Jersey has nearly 7,700 active-duty military personnel living in the state and about 428,000 veterans. If you’re stationed in New Jersey for military service, a retired vet or serving outside the Garden State, you can still get a break on your auto insurance for being in the armed forces. Most insurances companies voluntarily offer military discounts both to show appreciation for those who serve and to stay competitive with other insurance companies. Because your vehicle’s worth and your driving record are factors in setting your insurance rate, it pays to shop around before buying coverage.

Once you have insurance on the vehicle, you also enjoy special benefits with the New Jersey DMV. If you join the U.S. Armed Forces and already have a valid New Jersey registration, you can get a refund for the remainder of the registration period by writing a letter and submitting a form available here. Service-disabled or blind veterans can qualify for free registration under certain conditions.

New Jersey Service Members:
How the Vehicle You Drive Affects Your Premium

Rollover crashes are more likely among SUVs and pickups, according to the Insurance Information Institute, but an older model SUV has less effect on your premium than a recent model sports car.

Military Drivers: A Comparison of Premium Ranges by Driver Age and Vehicle
25-Year-Old Driver
50-Year-Old Driver
25th - 75th Percentile Median

Age Savings for New Jersey
Service Members

Median auto insurance
for service members:

$1,684
Male (25 yrs)$2,032
Male (50 yrs)$1,502
$530 savings
Female (25 yrs)$1,831
Female (50 yrs)$1,498
$333 savings

Compare Average Premiums Available to New Jersey Military Personnel

When you're looking for affordable auto insurance, it pays to talk to different insurers. Check out the average annual rates you can get in New Jersey.

Premium Comparison for a Military Driver
25th - 75th Percentile Median

Seniors in New Jersey

New Jersey requires insurance companies to give a discount to seniors who complete a state-approved driver safety course. After you successfully complete the course, you’ll receive a certificate to show to your carrier. The discount varies by insurance company and is good for three years. Seniors can get other discounts as well, including one for the state’s EZ-Pass card for toll roads.

Undocumented Workers in New Jersey

New Jersey lawmakers have proposed to let the state’s undocumented workers apply for a driver’s license, a prerequisite to car insurance. Supporters in the state legislature argue New Jersey roads would be safer if all drivers were licensed and insured. The bill would allow undocumented residents to obtain driver’s licenses with proof of their New Jersey residency, identity and date of birth.

In the meantime, young immigrants who have a valid work permit may be able to obtain a driver’s license through the federal Deferred Action for Childhood Arrivals, program. Qualifications include having lived in the United States continuously since 2007 and arrived here before age 16.

Ridesharing Insurance in New Jersey: Are You Covered?

Ridesharing services such as Uber have operated in New Jersey since 2014 in an unregulated climate. Proposals for insurance and licensing of ridesharing services have stalled in the state legislature, while taxi and limousine services, which are regulated, have complained about unfair trade practices. Until state laws are in place, New Jersey ridesharing services operate in a legal limbo, and passengers may not have the same insurance protections they would have during a cab ride.

In addition, ridesharing drivers may not be fully protected. Although ridesharing companies typically offer some form of liability insurance, drivers should check with their insurance agents to make sure they are fully covered. A personal auto policy generally doesn’t cover “driving for hire,” so some insurance companies are now offering ridesharing insurance.

Car Accidents: How to File a Claim in New Jersey

The New Jersey Department of Banking and Insurance advises you to take these steps after an accident:

  • Exchange insurance and contact information with all involved drivers
  • Call the police if there is injury, death or property damage
  • Contact your insurance company

If another driver caused damage to your vehicle, you have two choices. You can either file a claim with your insurance company (a first-party claim) or with the other driver’s (a third-party claim). However, you can only file a first-party claim if you have collision or comprehensive coverage.

If you file a third-party claim, the other driver’s insurer may reduce your payment if you share any blame for the accident. For example, if it’s found that you were 20 percent to blame for the accident and the other driver was 80 percent to blame, the insurance company may pay only 80 percent of your damages. If the accident was more than 50 percent your fault, you won’t be able to collect any third-party compensation.

Driver Safety: How Does New Jersey Rank?

“New Jersey is very pleased that we’ve been able to buck the national trend when it comes to road deaths and alcohol related accidents,” says Gary Poedubicky, acting director of the state’s Division of Highway Traffic Safety. “I credit this to our stricter enforcement of driving laws in New Jersey – like the Click It or Ticket campaign, the annual two-week crackdown on unbuckled drivers. It’s been instrumental in increasing our seat belt usage rate to 91 percent this year.”

New Jersey is also working hard to reduce the number of alcohol-related crashes through programs like “Drive Sober or Get Pulled Over,” in which police across the state step up their presence on the roadways during busy travel times during the year. This discourages intoxicated driving, says Poedubicky. The state also runs a sting operation called Cops in Shops program, he says, in which police pose as salespeople in liquor stores to nab underage drinkers.

New Jersey Driver Safety Ranking

4th in the U.S.
About Our Data

The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.

How did we create the safety rankings?

We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).

Driver Safety Profile Number of Fatalities Fatality Rate

The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.

Ranking
(National)

Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.

Drunk Driving-Related Fatalities 146 1.96 4th
Speeding-Related Fatalities 118 1.58 3rd
Passenger Vehicle Unrestrained Fatalities 141 1.89 8th
Unhelmeted Motorcycle Fatalities 2 0.03 3rd
Multiple Vehicle Fatalities 234 3.14 4th
Pedestrian Fatalities 129 1.45 31st
Bicyclist Fatalities 14 0.16 25th
Total Vehicle Fatalities 542 7.27 4th

Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety

New Jersey: Protecting You from Injury on the Road

Stringent state laws against drunk driving help cut down on New Jersey accidents, according to the DMV. First-time DUI offenders face up to 30 days in jail and fines. Mandatory seat belt laws and a statewide ban on cell texting while driving are also in place. New Jersey is the only state in the nation that requires display of a special windshield decal for teen drivers.

Nonetheless, the state still gets a yellow, or “caution,” rating from Advocates for Highway and Auto Safety, which urges the state to enforce seat belt laws for rear seat passengers and to make ignition interlocks mandatory after DUI convictions.

Safe Driving Laws – New Jersey

  Requirement State Law Details
Mandatory seat belts Required of driver and all passengers, but no primary enforcement for rear seat passengers
Child passenger safety Children 8 and younger must use an approved safety seat
Driving under the influence (DUI) DUI for 0.08% blood alcohol content in adults; 0.01% in teens. Penalties include license suspension of up to three months; up to 30 days in jail and a $500 fine on first offense
Ignition interlock after DUI At judge’s discretion
Talking on cell or texting while driving Ban on texting and using handheld cell phones
Protections for young drivers Graduated license program. Some nighttime driving restrictions; restriction on the number of teen passengers; windshield sticker required to designate young driver behind the wheel
Motorcycle helmet law Required for all riders
Bicycle helmet law Partial Riders 16 and under must wear a helmet

Sources: Governors Highway Safety Association and National Highway Traffic Safety Administration

Car Insurance Resources for New Jersey Residents

Filing an Auto Insurance Claim

A step-by-step guide from the NJDBI.

New Jersey Auto Insurance Buyer’s Guide

Comparison shopping guide published by the state’s Department of Banking and Insurance.

New Jersey Driver’s Manual

Info on driving laws and applying for a license.

Statewide Benefits for Older Persons

Seniors’ guide to insurance discounts on auto insurance.