New Jersey Car Insurance Requirements
Car insurance is mandatory for all registered vehicles in New Jersey, but the Garden State gives drivers three options to comply. The self-insurance option, usually only used by businesses and dealers, requires you to have at least 25 vehicles registered in your name. The other two options include purchasing a basic car insurance policy or purchasing a standard policy.
The basic policy is geared toward lower income individuals with limited assets. It offers no bodily injury or death liability by default; $10,000 per accident can be added as an option. A basic policy offers $5,000 per accident for property damage and $15,000 per accident for personal injury protection.
The only advantage of the basic policy is its significantly lower price. That makes it an especially attractive option for young people. However, the downsides are twofold:
- if you are sued after an accident he caused, you will be required to pay any judgment awarded to the other party out of your own personal resources; even if that means seizure of your personal assets
- if you are the victim of a negligent driver your right to sue is limited
A Standard Car Insurance Policy
Drivers that elect a standard car insurance policy are covered much more thoroughly. A standard policy includes bodily injury or death coverage of $15,000/$30,000, $5,000 in property damage coverage, $15,000 personal injury protection, and $15,000 of uninsured/underinsured motorist coverage.
You can add comprehensive and collision to a standard car insurance policy as well. In fact, if you have an outstanding loan on your vehicle your bank probably has made that a requirement already.
Providing Proof of Insurance
When a driver in New Jersey is the subject of a traffic stop he is required to furnish the police officer with a copy of his state insurance ID card. If he’s self-insured he should have a certificate provided by the DMV. A driver who’s unable to produce proof of insurance when requested by a police officer will likely get a citation accompanied by a small fine.
If you’re actually caught driving without insurance a first offense will cost you $300. For a second offense you can expect a $500 fine, 14 days in jail, and a 30-day community service stint. Once you get into the third offense and beyond, you’re getting into the realm of extremely stiff penalties.
Though car insurance is mandatory in New Jersey, they go out of their way to make it as affordable possible. It is one state where there’s really no good reason to not comply with the law.