TRENTON – The minimum amount of auto insurance coverage that drivers must have in New Jersey has gone up, adding roughly $120 or more to the yearly premiums of at least 1.1 million drivers.

As of New Year’s Day, the state’s required liability coverage for insurance plans issued or renewed increases to $25,000/$50,000 — up sharply from levels that were required for the last 50 years.

Another increase has already been cleared, in the same legislation signed by Gov. Phil Murphy in August.

Required coverage for property damage has also been increased to a minimum of $25,000 — up 500% from the previous minimum of $5,000.

Below is a breakdown of just what is impacted and what it means for most drivers.

NJ auto insurance required liability minimums 2023 (Townsquare Media, Canva)
(Townsquare Media, Canva)

🚗 What, specifically, is changing?

The minimum amount of required “Bodily Injury Liability” for auto insurance policyholders.

That’s coverage for claims and lawsuits by people injured as a result of “an auto accident you cause.”

From 1972 through 2022, the minimum amount on a standard policy was $15,000 per person, $30,000 per accident.

Starting in 2023, that has been increased to $25,000/$50,000.

Another minimum that’s been drastically hiked is “Property Damage Liability” — that is coverage for claims and lawsuits by people whose property is damaged as a result of an auto accident you cause.

Previously, it was $5,000 — and that’s been increased to $25,000.

🚗 So who does this impact the most?

The more than million NJ drivers who have been maintaining that minimum liability coverage, who amount to about one-fifth of the state's registered and insured drivers, will be the most impacted, as it's their premiums that are increasing.

Overall, the change also impacts whoever gets into a crash and needs to file a claim, as insurance companies will have to pay out higher amounts to cover injuries, death and/or property damages.

Also read: New Jersey is a no-fault state: What that means for drivers

🚗 What is this second increase already planned on liability minimum?

In three years, a second increase was already approved in the same legislation, upping those minimum amounts to $35,000/$70,000 minimum as of 2026.

🚗 What is the reason for the increased minimum levels?

Before the legislation was signed, supporters said it was overdue as victims of crashes have seen expensive medical bills or property damages not covered.

“When someone suffers losses or injuries exceeding that amount, they’re not even made whole,” Assemblyman Raj Mukherji, D-Hudson, previously said, noting that the old minimum liability coverage did not even cover an average $18,000 of expenses from a crash.

Other estimates put the average costs of a crash even higher.

As reported by Forbes, The Insurance Information Institutes said the average claim in 2020 for bodily injury after a collision was $20,235, while the average property damage claim was $4,711.

A Martindale-Nolo survey between 2015 and 2020 reported an average settlement of $23,900, according to the same report — while most received less than $10,000.

Traffic jam with rows of cars
(Getty Stock / ThinkStock)

🚗 Why the increased requirements now?

There has been a strong argument that this is extremely poor timing, as inflation and other post-pandemic economic stresses are as high as ever for those who will be most impacted by the higher liability coverage requirements.

Assemblyman Joe Danielsen, D-Somerset, previously said the measure would force the hands of residents already struggling to afford basic cost of living expenses.

“Affordability, not only just with insurance and transportation but just living in New Jersey — it’s painful. It’s tiring. It’s exhaustive,” he said.

🚗 Could there be more people who just decide to skip insurance, as a result?

Yes. Even though it is illegal to drive without insurance in the state, there might be a number of motorists who decide it’s just too expensive.

“I still think we will see a spike in the uninsured motorist rate because some people simply won’t be able to bear even the $130 we’re talking about,” Gary LaSpisa, vice president of the Insurance Council of New Jersey, previously said.

“The cost of everything is going up, and we are concerned that those who are on a fixed income and are forced to choose between paying for basic necessities such as gas, rent, groceries, etc., they may very well opt to forgo insurance altogether,” Allison Cooper, vice president of government affairs for the American Property Casualty Insurance Association, also previously warned over the summer, before the legislation was endorsed.

Currently, New Jersey has the nation’s lowest rate of uninsured drivers, 3.1%.

(Getty Stock)

🚗 Who decides who is at fault for the accident and how much they owe?

The following answer is directly from the state Department of Banking and Insurance:

“New Jersey has a ‘comparative negligence’ law which means that more than one person can be at fault in an accident.


Under this law, you can collect damages only if your degree of fault does not exceed that of other driver(s) in the accident. The settlement, however, can be reduced by your percentage of fault.


For example, if the other driver is 80% at fault and you are 20% at fault, you can collect for your damages because you were not more than 50% at fault.


However, the other driver’s insurer will only offer to pay for 80% of your damages.”

🚗What is the difference between Basic policy and Standard Policy in NJ?

There has been a “Basic Policy” option for auto insurance since 1998, when the Automobile Insurance Cost Reduction Act was passed.

It automatically includes a Limited Right to Sue option.

Having no liability coverage under such a basic plan means should a crash happen and you’re at least half at fault, damages and pain and suffering claims would be coming straight out of your own assets.

Also, “if you lack coverage and someone hits you, you cannot sue.”

“The Basic Policy should be considered by those with few family responsibilities and few real assets. It can provide a transition for younger drivers who are just beginning work, providing a basic, minimum protection when they may be least able to afford more comprehensive coverage,” according to the state Department of Banking and Insurance.

Erin Vogt is a reporter and anchor for New Jersey 101.5. You can reach her at

Click here to contact an editor about feedback or a correction for this story.

50 Most Popular Chain Restaurants in America

YouGov investigated the most popular dining brands in the country, and Stacker compiled the list to give readers context on the findings. Read on to look through America's vast and divergent variety of restaurants—maybe you'll even find a favorite or two.

The Worst Netflix Movies Of 2022

Netflix releases so many movies every year, they can’t all be classics.

Stars We Lost in 2022

See the famous icons we have had to say goodbye to in 2022, below.

Most Controversial Celebrity Magazine Covers Ever

Below, discover the most controversial celebrity magazine covers to ever hit the newsstands.

Former Child Stars Who Turn 30 in 2022

Below, you'll find out which major child stars turn in 2022. These celebs were a huge part of our childhoods, and now they're moving into the next decade of their lives. Who knows what awesome things we'll see from these actors, singers and triple-threats in their 30s!

20 Rock Stars Who Haven't Released an Album in Over 10 Years

Why the long wait?

The 99 top paying jobs in New Jersey

How much do you make? These are the occupations in New Jersey with the highest median annual compensation. Source: Federal Bureau of Labor Statistics, 2022

LOOK: Here's where people in every state are moving to most

Stacker analyzed the Census Bureau's 2019 American Community Survey data to determine the three most popular destinations for people moving out of each state.

More From Lite 96.9 WFPG