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A Guide to New Jersey Car Insurance

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Everyone knows that most states require car insurance in order to drive legally (Virginia and South Carolina being the exceptions). But what you may not know is not every state treats car insurance the same way. Insurance laws and requirements vary from state to state, and New Jersey is no different in this regard. Here is the rundown on car insurance laws in New Jersey, and what you can do to get the most out of your insurance dollar.

New Jersey Car Insurance Requirements

The law in New Jersey requires all drivers to have car insurance, and carry proof of their insurance while on public roadways. There is no requirement in New Jersey for insurance that covers your vehicle — only injury and property liability.

What is required in New Jersey is personal injury protection (PIP). This means carrying enough insurance to pay for your own injuries and covering any medical costs that you or your passengers might cause in an accident. In New Jersey, it’s possible for your health insurance provider to work with your car insurance to coordinate coverage.

New Jersey’s auto insurance minimums are somewhat lower than other states, which means taking the most basic liability plan required by law isn’t the best idea — it might meet the letter of the law, but also might not provide you with enough coverage in case of a serious accident.

The state minimums are as follows:

  • Bodily Injury Liability: $15,000 per person and $30,000 per accident
  • Property Damage: $5000 per accident
  • Personal Injury Protection: $15,000 per person

New Jersey is also a no-fault state, which means drivers must purchase their own insurance protection, and the insurance will pay damages and industries regardless of who is at fault in an accident. This is beneficial because it reduces the chances of a lawsuit after an accident, and it guarantees prompt medical attention when an accident occurs.

New Jersey is also one of a few states requiring a CARCO inspection, which is an independent inspection of a vehicle before it can be insured. The inspection covers the vehicle’s mileage, accessories, and condition, with photos being taken and sent to the insurance company. This is required for vehicles that will be covered by comprehensive and collision insurance. There is no fee for a CARCO inspection.

If, for any reason, a driver is caught without insurance, they are subject to a minimum fine of $300, up to a maximum of $1000, as well as suspension of their driver’s license for one year and mandatory community service. Multiple convictions could lead to jail time, fines of up to $5000, and longer suspension of a driver’s license.

Buying Car Insurance in New Jersey

Now that you know the laws and requirements of car insurance in New Jersey, here are a few tips on buying insurance. Keep in mind that the minimum possible coverage required by law is not recommended — you’re going to want more than that to make sure you’re sufficiently covered.

One of your first steps should be to compare New Jersey car insurance quotes to get the best deal you can. The cheapest quote is not always the best — you want to make sure you get the proper coverage for your money, as well as an insurer that will answer claims promptly and without difficulty.

Next, consider your deductibles. A higher deductible will mean a lower insurance premium, but it means paying more out of pocket if you should get in an accident. So if you don’t have a lot in the way of savings, maybe consider paying a higher premium in order to keep your deductible low.

Never be afraid to ask your insurer about discounts. You can get discounts on your insurance rates for having a good driving record or good grades at school; being in certain professions; having a security system or tracker in your car; taking a defensive driving course, or any number of other circumstances. You can also get a lower rate if your car is used or older — older cars cost less to repair or replace in case of an accident.

Finally, give some thought to purchasing coverage beyond liability. Again, this is where comparing insurance companies and talking to your insurer can be helpful. Additional coverage might include:

  • Comprehensive, which pays for vehicle damage in non-collision scenarios (theft, natural disasters, etc.)
  • Collision, which pays for damages resulting from a collision
  • Rental car reimbursement, which helps pay for a rental car in case your vehicle is damaged and cannot be driven due to an accident
  • Roadside assistance, which can cover you in case of breakdowns, flat tires, towing fees, or other driving mishaps that aren’t collisions
  • Additional PIP limits
  • Income continuation coverage, which will provide you with some ongoing income in case an accident renders you unable to work for a period of time
  • Funeral expense and death benefit coverage
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