Most states are split into two categories when it comes to car insurance: fault state and no-fault state (New Jersey). This references how compensation is handled in case of an auto vehicle wreck concerning two or more parties. Many states, such as Texas, are at-fault states, meaning the driver who is declared at-fault for the accident must compensate for any damages and injuries they cause.
New Jersey is known as a no-fault state. This means that compensation for damages or injuries are filed separately, no matter who caused the accident.
How Does Car Insurance Work in New Jersey?
Being a no-fault state doesn’t mean that the driver responsible for an accident in New Jersey will not face consequences. There are certain situations where a driver may be sued or expected to provide compensation to victims of a vehicle accident. As such, New Jersey required all drivers to carry a minimum amount of car insurance:
- $15,000 in bodily injury liability per person n
- $30,000 in bodily injury liability per accident n
- $5,000 in property damage liability
New Jersey drivers pay also be required to carry personal injury protection (PIP). PIP is crucial in no-fault states. In at-fault states, the driver who caused the accident would be held liable for the medical expenses of the victim and their passengers. In a no-fault state, PIP provides medical expense coverage for a driver and their passengers no matter who is declared at-fault for the accident. Another side of PIP also covers lost wages for a driver that is rendered incapacitated for a period of time after the accident.
How Much is Car Insurance in New Jersey?
New Jersey car insurance premiums depend on a lot of factors. This can include: n
- Age
- Credit score
- Driving record
- Location (frequency of claims in the area, cost of living, etc.)
- Value and make of the car
- Coverage limits
- Deductible
On average, car insurance in New Jersey costs $1,346 a year, which is about $112.16 a month. Having less coverage means lower monthly premiums, but it also leaves you and your vehicle vulnerable. On top of the state required amount of insurance, it’s also recommended that New Jersey drivers carry:
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Comprehensive Coverage covers the vehicle in case of loss or damage due to fire, hail, wind, theft, vandalism and more.
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Collision Coverage covers the vehicle after a collision with another vehicle or object.
Uninsured/Underinsured Motorist Coverage compensates for damages due to a wreck with another driver not carrying insurance.
