New Coverage Limits for NJ Auto Insurance

The New Jersey Senate is considering a bill during the 2022 session that would increase the minimum required policy limits for standard auto insurance policies. This bill is being sponsored by Attorney Jon Bramnick of Bramnick, Rodriguez, Grabas, Arnold & Mangan, LLC, who also serves as the state senator for Morris, Somerset, and Union Counties.

How Auto Insurance Works in New Jersey

All drivers in New Jersey are required to have auto insurance coverage. New Jersey law authorizes three types of auto insurance policies:

• Standard policies – By default, drivers will be offered a standard policy, which complies with minimum coverage requirements, including bodily injury liability coverage, property damage liability coverage, personal injury protection (PIP) coverage, and uninsured/underinsured motorist coverage. Policyholders have the option of purchasing higher policy limits for these coverages, in addition to purchasing other coverages such as comprehensive or collision coverage. 
• Basic policies – Drivers have the option of selecting a basic policy in lieu of the standard policy. Basic policies provide less coverage than standard policies but at a lower cost. Basic policies provide $5,000 in property damage liability coverage as standard and $10,000 in bodily injury liability coverage as an option. Basic policies also provide $15,000 in PIP coverage but do not offer uninsured/underinsured motorist coverage. Basic policies are intended for young drivers or drivers with few assets.
• Special Automobile Insurance Policies – These policies are available only to drivers who are enrolled in Medicaid with hospitalization. By law, this policy costs $365 per year paid in two installments, or $360 if paid in full upfront. This type of policy only provides medical coverage for emergency treatment and for treatment of serious brain or spinal cord injuries, up to $250,000, in addition to providing a $10,000 death benefit. SAIP does not provide liability coverage. 

Bill Increases Minimum Coverage Limits for New Jersey Auto Insurance Policies

New Jersey Senate Bill No. 481 proposes to increase the minimum coverage limits for auto insurance policies in New Jersey. Currently, the minimum required policy limits are:

• $15,000 per person, $30,000 per accident of bodily injury liability coverage
• $5,000 per accident of property damage liability coverage
• Uninsured/underinsured motorist coverage up to the limit of purchased bodily injury liability coverage

Bill No. 481 would increase required policy limits over a three-year period. Bodily injury liability coverage limit increases would include:

• $15,000 per person, $30,000 per accident for plans issued or renewed prior to January 1, 2023
• $25,000 per person, $50,000 per accident for plans issued or renewed on or after January 1, 2023, but prior to January 1, 2026
• $35,000 per person, $70,000 per accident for plans issued or renewed on or after January 1, 2026

Property damage liability coverage would increase to $25,000 per accident for plans issued or renewed on or after January 1, 2023. 

The law would also require insurers to notify named insureds whose original policy limits no longer met the minimum requirements that their policy limits are being increased to meet the new requirements. Insurers can automatically increase limits to meet the law and would not need to obtain a signed coverage selection from the named insured. 

Contact a Scotch Plains Personal Injury Lawyer to Discuss Your Car Accident Case in New Jersey

Did you or a loved one sustain serious injuries due to a car accident in New Jersey? Don’t let the medical bills pile up while you wait for the negligent party or their insurance company to do the right thing. Right now, you need an aggressive personal injury attorney on your side, fighting to get you the compensation you need, want, and deserve. The skilled attorneys at Bramnick, Rodriguez, Grabas, Arnold & Mangan, LLC represent clients injured because of car accidents in Edison, Woodbridge, Old Bridge, Piscataway, and throughout New Jersey. Call (908) 325-5571 or fill out our online contact form to schedule a free consultation about your case. We have an office conveniently located at 1827 E. 2nd St., Scotch Plains, NJ 07076, as well as offices in Westfield, Newark, East Brunswick, Clifton, Cherry Hill, and Elizabeth.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.