What Are the Main Types of Auto Insurance Coverage in New Jersey?

Related Attorney: Timothy E. Dinan

July 12, 2023What Are the Main Types of Auto Insurance Coverage in New Jersey?

In New Jersey, auto insurance coverage typically includes several types of coverage. The main types of auto insurance coverage in New Jersey are: 

Liability Coverage: Liability coverage is mandatory in New Jersey and is designed to cover damages or injuries you cause to others in an accident. It includes two components:

  1. Bodily Injury Liability (BI): This coverage pays damages for injuries suffered by others in an accident you caused.
  2. Property Damage Liability (PD): PD coverage pays for repairs or replacement of another person's property, such as their vehicle, if you are at fault in an accident.

Personal Injury Protection (PIP): Personal Injury Protection is also mandatory for most drivers in New Jersey. It is also called “no fault” insurance because it provides coverage for you, regardless of fault. PIP coverage provides medical expenses that are related to the accident, medically necessary, and designed to get you better (i.e. not palliative).

Uninsured/Underinsured Motorist Coverage (UM/UIM): This is some of the most important coverage you can have. It protects you if you are involved in an accident with a driver who either does not have insurance or does not have sufficient coverage to pay for your damages. If that happens, and the other driver is at fault, you can make a bodily injury claim with your own insurance company up to the limits of your UIM benefits. However, those benefits are reduced by the amount of coverage the other driver has; for example, if you have $100,000 in UIM coverage and are injured by a driver with the state minimum of $15,000, you would be able to make a claim with your insurance company for an additional $85,000.

Collision Coverage: Collision coverage pays for the repair or replacement of your own vehicle in case of a collision, regardless of fault. It is typically subject to a deductible, which is the amount you must pay out of pocket before the coverage applies.

Comprehensive Coverage: Comprehensive coverage protects your vehicle against non-collision-related damages, such as theft, vandalism, fire, or natural disasters. Like collision coverage, it is usually subject to a deductible.

It is recommended to review your policy and consult with an insurance agent to understand the specific coverage options and limits available to you. Take a look at the New Jersey Buyer’s Guide for More information too.