New Jersey Auto Insurance Minimums Increase 2026 | What Are the 2026 New Minimums for Car Insurance in NJ | Why Did New Jersey Raise Auto Insurance Minimums?

As of January 1, 2026, New Jersey has officially implemented the second and final phase of a landmark legislative expansion to auto insurance requirements. For the first time in decades, the "floor" for legal driving in the Garden State has been raised to reflect the modern reality of medical costs and litigation risks. New Jersey’s being the most densely populated state and its heavy traffic have made the roads here more dangerous than more rural states.

At Scura Wigfield Heyer Stevens & Cammarota, LLP, we have spent decades advocating for NJ residents in personal injury and car crash cases. We know that insurance isn't just a monthly premium; it is the primary shield protecting your home, your savings, and your future from the fallout of a catastrophic accident.

In my handling of auto cases in New Jersey, my experience is that the minimum insurance limits are not enough to protect individuals and their families in the event of serious accidents. You should always look to increase the limits. There are increased costs, but it is worth the analysis to see if you can afford it and compare what the higher limits will cost.

In this guide, we break down exactly what changed on January 1st, why the New Jersey Legislature took this step, and—most importantly—what these changes mean for your personal liability and your right to recover damages if you are injured.

The New 2026 Minimums: By the Numbers

For nearly 50 years, New Jersey's minimum insurance requirements were stuck in the 1970s. Until 2023, a driver could legally operate a vehicle with only $15,000 in bodily injury coverage. In an era where a single day in an ICU can exceed that amount, these limits were woefully inadequate.

Following the passage of Senate Bill S481 (P.L. 2022, c. 87), the state moved to a two-phase increase. We have now reached the final tier of that expansion.

The Breakdown of Phase II (Effective Jan 1, 2026):

• Bodily Injury Liability (Per Person): Increased to $35,000 (Up from $25,000).
• Bodily Injury Liability (Per Accident): Increased to $70,000 (Up from $50,000).
• Property Damage Liability: Remains at $25,000.
• Uninsured/Underinsured Motorist (UM/UIM): Must now match the new liability minimums ($35k/$70k).

If your policy was issued or renewed after January 1, 2026, your insurance carrier is legally required to adjust your coverage to meet these new standards. However, "compliance" with the law does not always equal "protection" for your family.

Why the Legislature Expanded Coverage Now

The push for higher limits was driven by a simple, harsh reality: Inflation. When the $15,000 minimum was first set, it could cover a significant portion of a medical bill or a new car. By 2026, that same amount is often exhausted before an accident victim even leaves the emergency room.

By raising the minimum to $35,000, the New Jersey Legislature aims to:

• Reduce "Judgment Proof" Scenarios: When an at-fault driver has extremely low insurance, an injured party often has no way to recover their losses, even if they win a lawsuit. Higher minimums ensure there is a larger pool of funds available for victims.
• Align with Modern Medical Costs: From diagnostic imaging (MRIs) to physical therapy and surgical intervention, the costs of treating a "permanent injury" under NJ's verbal threshold laws are higher than ever.
• Modernize Uninsured and Underinsured Motorist Protection: This is perhaps the most significant benefit for the average driver. Your own insurance protects you when you are hit by someone with no insurance or very low insurance. The 2026 increase raises the floor of that protection. I am of the strong belief that this is the most important insurance coverage you should carry.

The "Underinsured" Trap: Why $35,000 is Still a Risk

While $35,000 is a significant improvement over the old $15,000 limit, it is still remarkably low from a legal perspective. As managing partners at a firm that handles both Personal Injury and Bankruptcy, we see the "Underinsured Trap" from both sides.

Scenario A: You are the Victim

If you are hit by a driver who only carries the state minimum of $35,000, and your medical bills total $100,000, you are facing a $65,000 shortfall. Unless you have high Underinsured Motorist (UIM) coverage on your own policy, you may find yourself unable to collect the full value of your claim.

Scenario B: You are At-Fault

If you cause an accident and the other party's injuries exceed $35,000, your insurance company will pay out your limit and then step away. You are personally liable for the remaining balance. This is where your assets—your home equity, your 401(k), and your future wages—become vulnerable to a judgment.

Expert Note: At Scura, we often tell our clients that insurance is "Asset Protection." If you have a home or significant savings, carrying only the state minimum ($35,000) is a massive financial gamble.

The UM/UIM Benefit: Protecting Yourself

Many New Jersey drivers view the 2026 increase as just another "rate hike." However, it is vital to understand that this law also mandates higher Uninsured and Underinsured Motorist (UM/UIM) coverage.

In New Jersey, your UM/UIM limits generally match your liability limits. Because the liability floor rose to $35,000/$70,000, the protection you have against hit-and-runs and uninsured drivers has also risen.

This is your "safety net." If you are injured by a driver who fled the scene or let their policy lapse, your own carrier now owes you up to $35,000 (at minimum) for your pain and suffering.

The Danger of the "Basic" Policy

It is important to distinguish between a Standard Policy and a Basic Policy.

• The Standard Policy: This is what most NJ drivers have. It includes Bodily Injury, Property Damage, and the newly increased UM/UIM coverage.
• The Basic Policy: This "low-cost" option provides almost no protection. It usually offers $0 in Bodily Injury liability (though $10,000 can be added) and very limited PIP (Personal Injury Protection) medical benefits. Never buy a Basic Policy. We cannot emphasize this advice enough.

As of 2026, we strongly advise our clients to avoid the Basic Policy whenever possible. In a litigious state like New Jersey, the few dollars saved on monthly premiums for a Basic Policy can lead to a lifetime of debt if an accident occurs.

What You Should Do Today: A Checklist for NJ Drivers

The start of 2026 is the perfect time to audit your coverage. Don’t wait until you are involved in a collision to find out you are under-protected.

1. Review Your Declarations Page: This is the "summary" sheet of your insurance policy. Look for the "Bodily Injury" line. If it says $25,000/$50,000, your policy is out of date and will likely be adjusted at your next renewal.
2. Evaluate Your UIM Limits: We recommend carrying at least $500,000 in liability and UIM coverage if you own a home. The cost to jump from $35k to $500k is often much lower than you’d expect.
3. Check Your PIP (Personal Injury Protection): While this blog focuses on liability, don't ignore your medical coverage. NJ law allows you to select as little as $15,000 in PIP, but we advocate for the $250,000 limit to ensure your medical bills are paid regardless of who was at fault.
4. Consult with Legal Counsel: If you have been involved in an accident and are worried about insurance limits—either yours or the other driver's—speak with an attorney. Navigating the "verbal threshold" and UIM claims requires an experienced hand. Keep in mind that if you have the verbal or lawsuit threshold that you can only sue for certain type of injuries. We have experience trying many cases with the verbal threshold in various counties in NJ and the jury instruction is a tough one to overcome in order to recover in these cases.

Final Thoughts from Scura Wigfield Heyer Stevens & Cammarota, LLP

The 2026 insurance expansion is a step in the right direction for New Jersey consumer protection. It recognizes that our laws must keep pace with the economy. However, the law only sets the minimum, but it does not set the standard for what is safe.

I advise all clients in NJ to investigate increasing their limits. I especially advocate increasing your uninsured and underinsured motorist coverage as most people in NJ are driving without enough liability insurance. This means if you are seriously injured by the fault of another driver and they have only minimal liability limits, for example $35,000, and this is not enough to cover your injury you have a problem. If, however, you have your own underinsurance motorist coverage of another $500,000 or $1,000,000 then you have more money to pursue and recover for yourself and your family under your own policy. On our staff we have multiple trial attorneys and two retired Passaic County Judges that can provide advice on these issues.

Whether you are looking for advice on recovering from an injury or facing financial pressure due to an uninsured or underinsured claim from a car crash, our team is here to help. We have served New Jersey for decades, providing the grounded, expert advice necessary to navigate these complex legal waters.

Have questions about how the 2026 insurance changes impact a recent accident? Contact Scura Wigfield Heyer Stevens & Cammarota, LLP today for a free consultation. We also offer a free analysis of your car insurance policy to counsel you on appropriate limits. This is how serious our commitment is to the community and making sure you and your family are protected in the event of a car crash.