New Jersey Car and Motorcycle Insurance Law

Required Minimum Bodily Injury and Property Damage Coverages for Motor Vehicle Insurance Policies and Standard Automobile Insurance Policies

In New Jersey, a Motor Vehicle Insurance Policy includes a motorcycle insurance policy. A Standard Automobile Insurance Policy is different from a Basic Automobile Insurance Policy.

For motor vehicle and standard auto policies, the following minimum Bodily Injury coverage is required:

• $15,000 per person injured in any one accident and $30,000 for all persons injured in any one accident

In addition, the following minimum Property Damage coverage is required:

• $5,000 for injury to or destruction of property of others in any one accident

Optional Basic Automobile Insurance Coverage

• This coverage is a “No-Fault” policy, and it pays medical expenses of the insured, regardless of fault. However, it prevents an injured person from filing suit against a negligent driver. If elected, the bodily injury coverage requirements stated above do not apply. Instead, the insured gets a Personal Injury Protection (PIP) policy, which pays the insured, those riding with him or her, and pedestrians for injuries, regardless of fault. PIP covers medical expenses of $15,000 per person, but cannot exceed $250,000 per person for medical treatment for permanent/significant brain injury, spinal cord injury, disfigurement, or treatment of any other permanent or significant injuries. It limits property damage coverage to $5,000. The insured can then choose whether he or she wants to purchase an optional bodily injury coverage policy of $10,000 per person. This coverage is not available to motorcycle owners.

Compulsory Uninsured Motorist (UM) Coverage.

• All motor vehicle policies, except basic automobile insurance policies, must provide at least $5,000 of UM coverage.

Optional Uninsured (UM) and Underinsured Motorist (UIM) Coverage Available to those Purchasing Standard Automobile Insurance Policies.

• UM/UIM is only offered to those purchasing standard automobile insurance policies. If purchased, the coverage must be at least $250,000 per person injured in any one accident, $500,000 for all persons injured in any one accident, and $100,000 for property damage.

Optional Personal Injury Protection (PIP) Coverage Available to those Purchasing Standard Automobile Insurance Policies.

• PIP coverage is offered to those purchasing standard automobile insurance policies. PIP coverage can be purchased in the maximum amount of $250,000 per person to pay for medical expenses, without regard to fault. Under this coverage, income continuation benefits can also be purchased, with a weekly maximum payout of $100, up to $5,200. Essential service benefits can be purchased, with a maximum payout of $12 per day, up to $4,380. Funeral benefits can also be purchased up to a maximum of $1,000.

Tort Limitation Option Available to those Purchasing Standard Automobile Insurance Policies.

• In exchange for a reduced premium, purchasers of standard automobile insurance policies can limit their right to sue a negligent driver by electing the tort limitation option. If chosen, the insured can only sue if he sustains a bodily injury that results in death, dismemberment, significant disfigurement, significant scarring, displaced fractures, loss of a fetus, or a permanent injury.

Special Rules for Motorcycle Owners.

• Optional UM and UIM, PIP, and tort limitation are not available to motorcycle owners.

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