New Jersey Auto Coverage: No-Fault, PIP, and the Tort Choice
New Jersey's auto system is heavily tested because it is a no-fault state with a distinctive menu of policy choices. This chapter covers PIP and the no-fault framework, the choice between the limited and unlimited right to sue, and the Standard, Basic, and Special auto policies.
No-Fault and Personal Injury Protection (PIP)
New Jersey is a no-fault state: its auto policies include personal injury protection (PIP), which pays the insured's own medical expenses from a covered accident regardless of who was at fault (verified via nj.gov/dobi). On the Standard Policy, PIP begins at a minimum of $15,000 per person per accident with higher options available, plus additional coverage up to $250,000 for certain serious injuries. Producers should explain that PIP is first-party medical coverage, distinct from the liability coverage that pays others.
Standard, Basic, and Special Policies
New Jersey consumers choose among three policy types (nj.gov/dobi). The Standard Policy offers the fullest coverage: bodily-injury liability starting at a minimum of $35,000 per person / $70,000 per accident and property-damage liability starting at $25,000 per accident, with higher limits available. The lower-cost Basic Policy carries much more limited coverage and is not right for everyone. The Special Automobile Insurance Policy (SAIP) is a limited option for eligible low-income drivers enrolled in Medicaid with hospitalization. Because New Jersey has phased in minimum-limit increases, verify the current figures with DOBI.
The Limited vs. Unlimited Right to Sue
On the Standard Policy the insured must choose a tort option. The limited right to sue waives claims for pain and suffering unless the injury meets a defined threshold — for example loss of a body part, significant disfigurement or scarring, a displaced fracture, loss of a fetus, permanent injury, or death — while still allowing recovery of economic damages like medical bills and lost wages. The unlimited right to sue preserves the full ability to sue for pain and suffering, usually at a higher premium. This choice materially affects both price and claims, so producers must document the client's selection.