New Jersey Auto Insurance Quotes and Coverage Guide

New Jersey Motor Vehicle Insurance Questions & Answers

Q: Is auto insurance mandatory?

A: Yes. With the highest population density of any other state in the nation, auto insurance is mandatory in the Garden State because it only stands to reason people here are going to run into each other. New Jersey insurance laws were designed to protect the careful and conscientious from those garden-variety goobers who aren't.

Q: Is New Jersey a "no-fault" or a “tort” state?

A: Both. The system in New Jersey is what is known as “choice no-fault.” In New Jersey, drivers may select one of two options: a no-fault auto insurance policy, with a verbal threshold or a traditional tort liability policy. The verbal threshold applies to both the Basic liability policy and Standard policy in which the policyholder chooses no-fault coverage. The Basic policy contains lower amounts of coverage. For more information about the fascinating world of New Jersey auto insurance, you can visit http://www.state.nj.us/dobi/consmnu.shtml to find out more than you probably ever wanted to know.

Q: What type of insurance is required to purchase and maintain a New Jersey tag and registration?

A: All vehicles registered in New Jersey require three types of mandatory insurance:
-- Liability insurance pays others for damages that you cause if you are responsible for an accident. It does not cover medical expenses.
-- Personal injury protection (PIP) pays medical expenses if you or other persons covered under your policy are injured in an automobile accident. Often called No- Fault coverage, it pays your medical expenses if you were or were not at fault.
-- Uninsured motorist coverage protects you if you are in an accident with someone who lacks the minimum level of insurance required by law.

You can opt for a Standard policy (no-fault) with 15/30/5 limits or a Basic policy (tort) with 10/10/5 limits. The first two figures refer to bodily injury liabilitym and the third figure to property damage liability. For example, 15/30/5 means coverage up to $30,000 for all persons injured in an accident, subject to a limit of $15,000 for one individual, and $5,000 coverage for property damage.

If this confuses you as much as it does most PhDs, you can just go to your insurance agent, be brutally honest about your finances, assets, and all other things you wouldn’t even discuss with your hairdresser, and let him/her confuse you further.

Q: An insurance company denied me coverage. Isn’t that illegal?

A: You can never be denied auto insurance based on your gender, race, or ethnicity. In most circumstances, a company cannot refuse to sell you insurance based on where you live as long as you are an “eligible” person. (This has nothing to do with being married or not. A driver is considered an "eligible" person for insurance in the voluntary or "regular" market if he or she has fewer than seven insurance eligibility points on his or her record.)

If you are denied auto insurance coverage, the agent or company must state a reason. Common reasons include:

-- You are not an “eligible” person due to the number of points on your record.

-- The insurer is a “membership company” that only covers certain categories of drivers.

-- The Department of Banking and Insurance has permitted the insurer to stop writing new policies.

-- They just don’t like you. (Just kidding.)


Q: What if I fail to keep insurance on my vehicle that I’ve registered in New Jersey?

A: New Jersey state law requires that any registered vehicle be covered by an insurance policy. Failure to maintain coverage can lead to higher prices for new policies, placement in the “assigned risk” pool, suspension or revocation of your driver’s license or registration, and additional fines and penalties. Then “Jerk Alert” will be written on your file, and no will like you any more, either.

Q: What documents do I have to provide to get insurance?

A: That can vary, so be sure to ask and make a list of what is needed. You will be asked to provide a copy of your driver’s license and registration certificate for each covered vehicle, and you may be asked to supply other information or documents. Companies cannot require you to provide a copy of your driver’s "abstract," or Division of Motor Vehicle record. You may wish to bring one if you do not have time to wait for the company to obtain one. It’s up to you. If the company asks you for documents that seem strange or out of the ordinary, like your dog’s vet record or your personal address book, you can contact the New Jersey Department of Banking and Insurance here http://www.state.nj.us/dobi/consmnu.shtml and file a complaint, or you can just hang up the phone and call some other insurer.

Q: Can I do anything to reduce the cost of my insurance?

A: Yes. Outside of giving up driving altogether, you can do things like give yourself enough time to shop around. Prices vary from company to company. At the time of purchase, you will be asked to complete a "coverage selection form." Read the form carefully. You can pay less by taking advantage of cost-saving options available. Buy only the insurance you need. You can also help lower the cost of insurance for yourself and everybody else in New Jersey by reporting insurance fraud and spotting aggressive drivers who cause accidents. But then you could be called something that might hurt your feelings, and so you have to choose: “snitch” or “save” – only you can decide.