Insurance
Car Insurance in New Jersey
Published September 24, 2026 · Last updated October 1, 2026
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Three kinds of car policy in New Jersey
| Standard policy | Basic policy | Special Automobile Insurance Policy (SAIP) | |
|---|---|---|---|
| Who it's for | Most drivers | Drivers with few assets to protect | Drivers on federal Medicaid with hospitalization |
| Liability for injuries you cause | $35,000 per person / $70,000 per crash, or more | None, unless you add $10,000 | None |
| Damage to others' property | $25,000 or more | $5,000 | None |
| Your own medical bills (PIP) | $15,000 or more, up to $250,000 for certain serious injuries | $15,000, up to $250,000 for certain serious injuries | Emergency treatment, and up to $250,000 for serious brain and spinal cord injuries |
| Uninsured/underinsured motorist | Available up to your liability limits | Not available | Not available |
| Price | Depends on you | Usually lower | $365 a year ($360 if paid in full) |
The standard policy
This is what most New Jersey drivers carry. You choose your limits, starting at 35/70/25. You can buy uninsured and underinsured motorist coverage up to your liability limits.
The basic policy
The basic policy is cheaper, but it gives you much less. With only $5,000 for damage to other people's property and no liability for injuries unless you add $10,000, a serious crash could leave you owing a lot out of pocket. The state says it's meant for people with few assets to lose.
SAIP ("dollar-a-day" insurance)
SAIP costs $365 a year. It's only for drivers enrolled in federal Medicaid with hospitalization. It pays for emergency treatment after a crash, serious brain and spinal cord injuries up to $250,000, and a $10,000 death benefit.
It doesn't cover damage you do to others or to your own car. It meets the law's requirement, but it won't protect you if you cause a crash.
Your right to sue: "Limitation on Lawsuit" or "No Limitation"
On a standard policy, you pick one:
Limitation on Lawsuit costs less. After a crash, you can only sue the other driver for pain and suffering if you have one of these injuries:
- loss of a body part
- significant disfigurement or scarring
- a displaced fracture
- loss of a fetus
- a permanent injury (one that won't heal to work normally, based on objective medical proof)
- death
No Limitation costs more. It keeps your right to sue for pain and suffering for any injury.
Three things to know:
- Your medical bills and lost wages aren't affected. Your PIP pays those either way, and you can still sue for economic losses. The choice only affects pain and suffering.
- It covers your household. Your choice applies to your spouse, your children, and relatives who live with you and don't have their own car policy.
- If you leave it blank, the law picks Limitation on Lawsuit for you.
Ask for a quote both ways so you know what you're saving.
Who pays your medical bills first: the PIP choice
New Jersey is a no-fault state. Your PIP pays your medical bills after a crash, no matter who caused it.
You can also choose to make your health insurance pay first. Your car insurance then pays only what your health plan doesn't. That lowers your car insurance price. It only makes sense if your health plan covers car crash injuries. Not every plan does, so ask your health plan before you choose.
Why is car insurance so expensive in New Jersey?
A few reasons are likely:
- Dense traffic. New Jersey is the most densely populated state, so more cars share the road.
- Rich PIP benefits. Medical coverage of up to $250,000 for serious injuries costs more to insure.
- Uninsured drivers. About 14.1% of New Jersey drivers were uninsured in 2023.
- Repair and medical costs in the New York and Philadelphia metro areas.
What you control:
- your lawsuit option
- your PIP amount and whether health insurance pays first
- your deductibles
- your liability limits
Not a quote or an offer. Your price comes from the insurance company.
[Compare quotes]
The catch: the lowest New Jersey quotes often stack every savings choice at once. That can mean a basic policy, Limitation on Lawsuit, and the lowest PIP. Before you pick the cheapest one, look at what's left if you're hurt in a crash that isn't your fault.
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Related services
Own a home in New Jersey? See New Jersey homeowners insurance. Need more liability protection than your car policy gives you? See umbrella insurance.
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Sources
- NAIC auto insurance data (2023), via Insurance Information Institute
- NJ Department of Banking and Insurance, The standard policy
- NJ Department of Banking and Insurance, The basic policy
- NJ Department of Banking and Insurance, Special Automobile Insurance Policy (SAIP)
- NJ Department of Banking and Insurance, 2026 Auto Insurance Buyer's Guide
- Insurance Information Institute, Uninsured motorists (IRC 2023 data)