New Jersey Car Accident Laws: Everything You Need to Know (2026)

# New Jersey Car Accident Laws: Everything You Need to Know

> **AT A GLANCE:**
> – **System:** Choice no-fault (Basic Policy vs Standard Policy)
> – **Comparative fault:** Modified 51% bar
> – **PIP:** $15,000 minimum for both policy types
> – **Statute of limitations:** 2 years PI, **6 years PD** (longest among 10 states)
> – **Minimum insurance:** 35/70/25 (Standard) or PIP-only (Basic)
> – **Verbal threshold vs No threshold** — affects right to sue

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## New Jersey’s Choice No-Fault System

New Jersey has one of the most complex auto insurance systems in the country. Drivers choose between two policy types, each with further options:

### Basic Policy
– **$15,000 PIP** (medical expenses only)
– **Optional** $10,000 property damage liability
– **No bodily injury liability** coverage to others
– Lowest premiums
– Very limited right to sue for pain and suffering

### Standard Policy
– **$15,000+ PIP** (medical, lost income, essential services)
– **35/70/25** minimum liability coverage
– Choose between **Verbal Threshold** and **No Threshold**
– Higher premiums than Basic
– Better protection overall

### Verbal Threshold vs No Threshold

This choice affects your right to sue for pain and suffering:

**Verbal Threshold (Limitation on Lawsuit):**
– Default option, less expensive
– Can only sue for pain and suffering if injury qualifies as “serious”
– Serious injuries include: death, dismemberment, significant scarring, displaced fractures, loss of fetus, permanent injury

**No Threshold (No Limitation on Lawsuit):**
– More expensive
– Can sue for pain and suffering from **any** injury
– No injury severity requirement

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## PIP Coverage

Both Basic and Standard policies include a minimum **$15,000 PIP**:

– Medical expenses
– Lost income (Standard only)
– Essential services (Standard only)
– Funeral expenses (Standard only)
– Pays regardless of fault

Additional PIP coverage can be purchased up to $250,000.

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## Modified 51% Comparative Fault

When fault-based claims are available, New Jersey follows **modified comparative fault** (NJSA 2A:15-5.1):

– At **50% or less** fault: recover damages, reduced by your fault %
– At **51% or more** fault: recover **nothing**

**Important:** Comparative fault only applies to fault-based claims. PIP benefits are paid regardless of fault.

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## Minimum Insurance Requirements

### Standard Policy

| Coverage | Minimum |
|———-|———|
| Bodily Injury per Person | $15,000 |
| Bodily Injury per Accident | $30,000 |
| Property Damage | $5,000 |
| PIP | $15,000 |
| UM/UIM | 15/30 |

### Basic Policy

**Note:** NJ’s 35/70/25 Standard minimums (tied with PA) are the lowest among the 10 states covered. UM/UIM coverage is included with Standard policies.

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## Statute of Limitations

**New Jersey’s 6-year property damage** statute of limitations is the **longest among all 10 states** covered on this site.

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## Accident Reporting

NJ’s $500 threshold is among the lowest, meaning most accidents meet the reporting requirement.

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## Property Damage: Always Fault-Based

Like New York, New Jersey’s no-fault system only applies to **personal injury**. Property damage claims are always **fault-based** — you pursue the at-fault driver’s property damage liability coverage.

**Basic Policy issue:** Basic Policy holders have no mandatory PD liability. If a Basic Policy driver hits you, they may have no property damage coverage for your vehicle.

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## How New Jersey Compares

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## Key Concepts

### Understanding Your Policy Type

### The Verbal Threshold in Practice

Under the Verbal Threshold, these injuries typically qualify for pain and suffering claims:
– Fractures (displaced)
– Significant scarring or disfigurement
– Loss of a body part
– Loss of a fetus
– Permanent injury documented by medical evidence

Soft tissue injuries (whiplash, sprains) **often do not qualify** under the Verbal Threshold, which is why many plaintiffs’ claims are barred at this step.

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## Frequently Asked Questions

### What is the difference between Basic and Standard Policy?
**Basic:** $15K PIP only, no liability to others, very limited right to sue. **Standard:** Includes BI/PD liability, UM coverage, and broader PIP. Standard is recommended for better protection.

### What is the Verbal Threshold?
A limitation on your right to sue for pain and suffering. With the Verbal Threshold, you can only sue if your injury is “serious” as defined by law. Without it (No Threshold), you can sue for any injury.

### Why is NJ’s PD statute of limitations 6 years?
New Jersey’s general statute for property damage (NJSA 2A:14-1) provides 6 years. This is the longest among the 10 states on this site.

### Can I change my policy type?
Yes, contact your insurer. Changes take effect on renewal. You cannot change retroactively after an accident.

### What if a Basic Policy driver hits me?
Basic Policy holders may have **no property damage liability**. You would need to use your own collision coverage or sue the driver directly.

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## Related Guides

– [What to Do After a Car Accident in New Jersey](/new-jersey/car-accident-guide/)
– [How to File an Insurance Claim in New Jersey](/new-jersey/insurance-claim/)
– [Do You Need a Lawyer After a Car Accident in New Jersey?](/new-jersey/do-i-need-a-lawyer/)

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**DISCLAIMER:** This website is not a law firm and does not provide legal advice. This page provides general educational information only. Laws vary by state and change frequently. Always consult a licensed attorney in your state for advice specific to your situation. Last updated: March 2026.

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