New Jersey Car Insurance

New Jersey car owners have a choice between two types of auto insurance policies: basic or standard.

The basic policy meets only the minimums needed to drive legally in the Garden State. It consists of:

• Property damage liability of $5,000,
• Personal injury protection (PIP) of $15,000 per person, per accident

The basic policy covers your own injuries and a small amount of damage to other cars you hit, which makes it suitable only for those who have little savings or few other assets. There is an option to add $10,000 in bodily injury liability, but uninsured motorist coverage is not available. Your right to sue for pain and suffering is limited to severe or permanent injuries.

For most drivers, we recommended New Jersey's standard policy, which includes:

• Bodily injury liability of at least $15,000 per person/$30,000 per accident. If you have substantial savings, a home or a business, you should raise those limits even higher.
• Property damage liability of at least $5,000. This can be raised, and should be.
• PIP of $15,000 per person or accident; this can be raised as high as $250,000.
• Uninsured and underinsured bodily injury motorist equal to your liability limits.
• Underinsured motorist property damage of at least $5,000.

Holders of a standard policy can choose between the limited right to sue and the unlimited right to sue. The unlimited option means you retain the right to sue for pain and suffering over any injury.

With both the basic and standard New Jersey car insurance policy, your medical bills and lost wages are paid up to your limits by your PIP coverage and then by any bodily injury liability claim or lawsuit brought against the at-fault driver.

Regardless of the limit you have chosen, PIP will pay up to $250,000 for certain severe injuries such as damage to the spinal cord or brain.

Collision and comprehensive, which protect your own vehicle, can be added to either a basic or standard policy.

Eligibility points: Auto insurance companies assign motorists eligibility points for traffic violations, at-fault accidents and suspensions. Also, newly licensed drivers, regardless of age, are assigned three "inexperience" eligibility points. For each year of experience the driver gets, one point is removed. To be considered for the voluntary insurance market in New Jersey, you need to accumulate fewer than seven insurance eligibility points in the preceding three years.