New Jersey PIP Coverage Explained

  • Auto
  • /
  • New Jersey PIP Coverage Explained

New Jersey is one of a few states that require all drivers to carry a minimum limit of personal injury protection, or PIP. PIP is a coverage drivers carry to ensure their medical expenses are covered in the event of an accident, regardless of who’s at fault. 

New Jersey is one of 13 states with no-fault laws, where drivers must carry a first-party medical benefit (FPMB) as a stipulation of the law. FPMBs such as PIP cover the policyholder’s expenses, so they don’t need to rely on another driver in the event of an accident. Let’s find out how PIP works on a New Jersey auto insurance policy, what it covers, and the subtle nuances of the coverage.

New Jersey PIP Coverage Explained

All drivers are required to maintain a minimum amount of auto insurance in New Jersey, which includes a minimum limit of PIP coverage. PIP is a coverage type that the policyholder uses on their own expenses and is often required in a no-fault state such as the Garden State. Policyholders have direct access to the funds provided by their PIP coverage, which they can use to cover any medical expenses they incur in an accident, regardless of who was at fault. 

To cover the expenses incurred in an accident, New Jerseyans will default to their PIP coverage first, then look to the at-fault driver to cover the remaining costs. If the policyholder caused the accident, they will either have to rely on the other coverages on their policy that cover their own expenses or pay for the remainder of the bill out of pocket. 

Drivers can use their PIP coverage for any medical expenses they incur up to their coverage limit and only once they pay their deductible. All drivers in the Garden State must have at least $15,000 in PIP, but drivers can opt for over $250,000 in coverage. 

How Does Personal Injury Protection in New Jersey Work?

In New Jersey, PIP is required on all auto insurance policies, with a minimum limit of at least $15,000 of coverage for every driver. This coverage gives drivers access to a vast range of coverage for all types of medical expenses, including standard costs like ambulance rides or hospital stays, ranging all the way to work loss or childcare expenses. This coverage will protect the policyholder and typically protects any uninsured passengers in their vehicle, like children or other adults who don’t have auto insurance policies.

When a policyholder is injured in an accident, they’ll first invoke their PIP coverage to begin paying off their medical expenses or debts. Once they’ve maxed out their PIP coverage limit, they’ll either rely on any other first-party coverages on their policy, like medical payments coverage (MedPay), or they’ll rely on the at-fault driver’s liability coverage. 

If the policyholder is at fault in an accident and doesn’t have any other first-party coverage besides the minimum limit of PIP, they’ll have to find another way to cover their medical expenses. If the policyholder was the victim in the accident, they’d rely on the at-fault driver’s liability coverage to cover the remainder of their expenses. If the driver that caused the accident is uninsured or underinsured, the victim will rely on their uninsured or underinsured motorist coverage (UM/UIM).

Drivers in tort states, sometimes called at-fault states, rely on each other’s liability coverage in the event of an accident. Waiting for fault to be assigned in an accident can make the process of receiving insurance coverage inefficient. States generally adopt no-fault laws because they lack the bandwidth in the insurance and legal systems to assign fault to each accident before drivers can receive their insurance benefits.

How Much PIP Coverage Do I Need in New Jersey?

Drivers must have at least $15,000 in New Jersey pip coverage on their policies, no matter what type of policy they carry. Since the Garden State is a no-fault state, all drivers must carry the no-fault coverage on their policies. 

New Jersey auto insurance policies differ from those in other states in that there isn’t one set standard for a minimum coverage policy. Instead, New Jerseyans can carry either a basic or standard policy, each of which has different minimum coverage requirements. 

Insurance laws in the state require drivers with a basic policy to have at least $10,000 in bodily injury liability per accident, $5,000 in property damage liability per accident, and $15,000 in PIP per accident. Those with a standard policy must have at least $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident, $25,000 in property damage liability per accident (25/50/25 liability coverage), the same 25/50/25 limit for UM/UIM coverage, and $15,000 in PIP coverage. Those who finance or lease their vehicles may also be required to have collision and comprehensive coverages on their policies.

Driving without insurance in the Garden State is illegal. Those who fail to comply with the mandatory insurance minimums in the state may face severe penalties such as fines, license or registration suspension, vehicle impoundment, or even jail time. While those caught driving without sufficient coverage in the state don’t risk filing for SR-22 insurance, they may require specialized, high-risk insurance in the future as insurers are hesitant to insure drivers who disregard mandatory insurance minimums. 

Ready to Save Money on Auto Insurance?

Rethink your auto insurance premium with a free quote from the nation’s top companies.

What’s the New Jersey PIP Law?

All drivers in the Garden State must carry minimum limits of liability and PIP coverage, and any policies with additional PIP coverage in New Jersey are considered full coverage policies. Drivers are only required to carry $15,000 in PIP, so anything more is considered additional; thus, a policy with additional PIP is considered full coverage.

The average full coverage policy in the Garden State will likely contain higher limits of the necessary coverages, plus additional coverage types like collision, comprehensive, MedPay, or gap coverage, among others. The average premium for a full coverage policy in New Jersey is about $1,900 annually, or about 15% more than the national average of $1,670 annually.

While a minimum coverage policy will always be the cheapest policy in the state, it may not always be the safest option. Car insurance is highly subjective based on the driver, and policies are very customizable based on each driver’s needs and lifestyle. However, getting a full coverage policy from one of the top insurers in the state is a great way to maximize one’s savings without sacrificing coverage.

What’s the New Jersey Personal Injury Statute of Limitations?

In New Jersey, the PIP statute of limitations is about three years, as is the statute of limitations for many other coverages and in many states. This means that policyholders have up to three years from the accident date to file a PIP claim to invoke their benefits. However, the statute of limitations can vary on a case-by-case basis, so it’s always a good idea to contact one’s insurer as soon as possible following an accident. 

It’s generally good practice to file a claim immediately after an accident to get the ball rolling on all the necessary processes following a claim. States with no-fault laws generally see more strain on their legal and insurance systems, hence the reason for the no-fault law in the first place. However, should a driver need to get their insurer involved after an accident, or should they proceed with legal action against the other driver in an accident, it’s always better to get started sooner rather than later, as those expenses tend to add up quickly.

What Happens When PIP Is Exhausted in New Jersey?

When a driver exhausts their PIP medical expense limit in New Jersey, there are a few things they may be able to do to receive coverage for their remaining medical expenses. However, the course of action will vary case-by-case.

Should a driver exhaust their PIP limit paying for the medical expenses they incurred from an accident they caused, the only remaining coverage they may be able to invoke is MedPay, and that’s only available on full coverage policies. Should the at-fault driver have a standard or basic policy, they must find another way to pay for their medical expenses.

If the victim of an accident exhausts their PIP funds, they may have a few more options for coverage than the at-fault driver. If an uninsured or underinsured driver caused the accident, the victim can invoke their UM/UIM coverage to cover the remainder of their expenses. The victim may also invoke the at-fault driver’s liability coverage if the at-fault driver has an active and adequate policy. 

If the victim of the accident exhausts all the insurance benefits they qualify for and still has outstanding medical expenses or debts, they may be able to seek legal action with the at-fault driver to recover damages. 

How To Get New Jersey Car Insurance Quotes Online

Whether you’re looking to raise your New Jersey PIP limits or are just curious about what policies and rates you qualify for, the best way to see all your possibilities in one place is to get and compare quotes online. By getting and comparing quotes from several insurers, you can best tailor your policy to meet the demands of your lifestyle and budget so you can have a little bit of cash left over to head to Atlantic City for an exciting night out.

Luckily, you’ve come to the right place for quotes. Here at Clovered, we have a free quoting tool you can use to access your unique quotes faster than the time it takes to eat a piece of saltwater taffy from start to finish. If you’d rather chat with an agent about your quote, contact one of our licensed agents at 833-255-4117 or

Ready to Save Money on Auto Insurance?

Rethink your auto insurance premium with a free quote from the nation's top companies.

The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

Scroll back to Top