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What Changed: The Old 15/30/5 vs. the New 35/70/25 Standard
New Jersey's auto insurance minimums were notoriously among the lowest in the country for decades. Under the old 15/30/5 system, drivers were only required to carry $15,000 in bodily injury liability per person, $30,000 per accident, and a barely functional $5,000 in property damage coverage. Those numbers hadn't kept pace with the real-world cost of accidents, medical bills, or vehicle repairs — and lawmakers took notice.
In 2022, New Jersey passed P.L. 2022, c.87, a two-phase law designed to modernize the state's coverage floor. The first phase took effect January 1, 2023, lifting minimums to 25/50/25. The second and final phase launched January 1, 2026, bringing the current standard to 35/70/25 — now in full effect for all new and renewal policies issued on or after that date.
Here's how the evolution breaks down:
| Coverage Type | Pre-2023 (Old) | 2023–2025 | 2026 (Current) |
|---|---|---|---|
| Bodily Injury – Per Person | $15,000 | $25,000 | $35,000 |
| Bodily Injury – Per Accident | $30,000 | $50,000 | $70,000 |
| Property Damage – Per Accident | $5,000 | $25,000 | $25,000 (unchanged) |
| UM/UIM – Per Person | Matched liability | Matched liability | $35,000 |
| UM/UIM – Per Accident | Matched liability | Matched liability | $70,000 |
| PIP – Per Person | $15,000 | $15,000 | $15,000 (unchanged) |
Importantly, property damage stayed at $25,000 — there was no additional increase in that category for 2026. The big jumps are in the bodily injury and uninsured/underinsured motorist (UM/UIM) coverage lines. Personal injury protection (PIP) also remains at the $15,000 base level (extendable to $250,000 for certain severe injuries) and was not affected by this round of changes.
For a broader look at how NJ compares to other states, see our guide to car insurance minimums by state.
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Why New Jersey Raised Its Requirements
The reasoning behind the increase is straightforward: New Jersey's old minimums were dangerously out of touch with modern accident costs. Medical care costs have risen dramatically over the past two decades, and a single serious injury in a car accident can easily result in bills exceeding $50,000–$100,000 or more. Under the old 15/30/5 system, a severely injured accident victim could exhaust the at-fault driver's entire policy payout in a matter of days — leaving both parties financially exposed.
New Jersey is also one of the most densely populated and heavily trafficked states in the country. Higher traffic density means a greater likelihood of multi-vehicle accidents, which makes the per-accident limit especially critical. Prior limits had gone largely unchanged since the 1970s, making the 2022 overhaul long overdue.
The phased approach was intentional — it gave insurers time to file updated rates and gave drivers a three-year window to adapt before the final jump to 35/70/25. Per NJ DOBI Bulletin No. 25-06, all insurers issuing auto policies in New Jersey were required to have approved rates on file for the new minimums well in advance of January 1, 2026.
Understanding how New Jersey's no-fault and tort rules interact with these new limits is also important. For a full picture of how NJ's auto insurance system compares nationally, check out car insurance laws by state. You can also learn how no-fault insurance and PIP requirements apply to New Jersey drivers specifically.
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How This Affects Current Policyholders & What It Costs
Automatic Updates at Renewal
If you have a standard NJ auto policy, your insurer is legally required to update your coverage to the new 35/70/25 minimums the next time your policy renews on or after January 1, 2026. You don't need to call and request the change — but you should verify it happened by reviewing your updated declarations page. Drivers who already carry limits above the new minimums will see no change to their coverage levels.
What It Means for Your Premium
New Jersey is the only state in the country experiencing double-digit percentage rate increases in 2026. According to the ValuePenguin/LendingTree "State of Auto Insurance 2026" report, the state average is rising 10.46% — the nation's largest increase — while the broader U.S. average is expected to rise just 1%. Analysts attribute part of this spike to New Jersey having delayed and denied rate increases over several prior years, in addition to the new coverage mandate.
Individual carrier increases vary considerably:
| Insurance Carrier | Projected 2026 Rate Increase |
|---|---|
| NJM | ~21.18% at renewal |
| Plymouth Rock | ~6.24% |
| Erie | ~7.92% |
| GEICO | Not specified (major carriers trending lower) |
| State Farm | Not specified (major carriers trending lower) |
| National Average (all states) | ~1.00% |
The NJ average full-coverage premium now ranges from approximately $2,781 to $3,254 per year depending on the source and methodology — significantly above the national average of roughly $2,079–$2,496 annually. Bankrate reports NJ full-coverage rates running about 21% above the U.S. average, while minimum coverage in NJ runs approximately 72% higher than the national average. For minimum coverage, NJ drivers are paying an estimated $1,413 to $2,160 per year. New Jersey ranks among the 10 most expensive states for car insurance nationally.
The exact premium impact varies by insurer, driver profile, location, and prior coverage level. Expect the most significant increases for:
- Drivers on basic or bare-minimum policies
- Young or high-risk drivers (already paying elevated premiums)
- Urban NJ drivers in high-density areas like Newark, Jersey City, and Passaic (where rates can reach $4,000–$4,300 annually for full coverage)
Penalties for Non-Compliance
The NJ Motor Vehicle Commission is clear: all drivers must carry proof of valid insurance that meets current state minimums. Under N.J.S.A. 39:6B-2, failure to do so can result in:
- Fines of $300–$1,000 for a first offense, plus mandatory community service and court costs
- License and registration suspension for one full year on a first offense
- $250 annual surcharges for three consecutive years
- Vehicle impoundment — with a $100 fee plus towing and storage costs to reclaim
- Escalating penalties for repeat offenses: up to $5,000 in fines, 14 days in jail, and a license suspension of two or more years
- Full out-of-pocket liability for any accident damages exceeding your coverage
Should You Buy More Than the Minimum? NJ-Specific Guidance
The short answer: yes, in most cases. The new 35/70/25 standard is a meaningful improvement over NJ's historic lows, but it still falls short of what financial advisors and insurance professionals typically recommend.
Why Minimums Alone Aren't Enough
Consider a scenario where you cause an accident injuring two people. If each victim's medical bills reach $50,000, your $35,000 per-person limit covers only part of the cost — and you're personally responsible for the rest. In a litigious state like New Jersey, that gap can trigger lawsuits, wage garnishment, and asset seizure.
The same logic applies to property damage. A $25,000 property damage cap sounds reasonable, but luxury vehicles, trucks, and situations involving multiple damaged cars can push costs far beyond that ceiling. With average new vehicle transaction prices approaching $50,000 in 2026, this limit is increasingly easy to exceed.
Legal experts and attorneys consistently advise NJ drivers to prioritize higher UM/UIM coverage especially, given how many vehicles on state roads were previously carrying bare-minimum or no coverage. Learn more about bodily injury liability limits and how to choose the right amount for your situation. You can also use our underinsurance check guide to see whether your current policy truly protects you.
Recommended Coverage Levels for NJ Drivers
A 100/300/100 policy is widely considered the gold standard for personal auto coverage in high-traffic, litigious states like New Jersey. It dramatically reduces your personal financial exposure — and the cost difference from 35/70/25 is often smaller than drivers expect. Drivers with significant assets should also consider a personal umbrella policy for an additional layer of protection beyond auto coverage limits.
For property damage liability, experts recommend a minimum of $50,000–$100,000 in 2026, given that the average new vehicle price now approaches $50,000. The state's $25,000 minimum is especially easy to exhaust in accidents involving newer cars or multiple vehicles.
For guidance on selecting the right liability limits for your financial situation, read our article on how to choose liability limits. And if you're wondering whether the legal minimum is ever truly enough, our deep-dive on state minimum car insurance is a must-read for NJ drivers.
You should also consider how car insurance coverage recommendations apply to your full financial picture — especially as your UM/UIM limits now mirror your liability floor under the new law. If you currently carry liability-only coverage, see how liability-only car insurance stacks up against the new NJ requirements. And if you're curious how NJ's rates compare nationally, see our car insurance rates by state guide.
Frequently Asked Questions
Does the 35/70/25 change apply to Basic Policy holders in New Jersey?
No — the new 35/70/25 minimums apply specifically to standard auto insurance policies in New Jersey. Basic Policy holders are subject to different, more limited requirements. The Basic Policy doesn't require bodily injury liability by default (it's optional at just $10,000), property damage is only $5,000, and it does not include UM/UIM coverage. The coverage gap between Basic and Standard policies has widened significantly in 2026, and insurance professionals strongly advise most NJ drivers to upgrade to a standard policy.
Will my insurer automatically update my policy to the new minimums?
Yes, in most cases. Under NJ DOBI Bulletin No. 25-06, insurers are required to automatically update standard policies to meet the new 35/70/25 minimums at the time of renewal on or after January 1, 2026. They must also notify you of the change. However, you should still confirm by reviewing your updated declarations page and contacting your insurer if anything looks incorrect.
What does "35/70/25" actually mean in plain language?
The three numbers refer to your maximum liability payouts in an accident you cause. $35,000 is the most your insurer will pay for injuries to any single person. $70,000 is the total cap for all injuries across all people in one accident. $25,000 is the limit for damage to the other person's vehicle or property. Any costs beyond these limits become your personal financial responsibility.
How much will the new minimums increase my car insurance premium in NJ?
New Jersey is projected to see the nation's largest average rate increase in 2026 at 10.46% — the only state with double-digit hikes — while some individual carriers like NJM are projecting renewal increases as high as 21.18%. Full-coverage premiums in NJ now average between $2,781 and $3,254 annually depending on the source — well above the national average. Shopping multiple carriers before your renewal is the best way to minimize the impact.
Does New Jersey's UM/UIM coverage also increase under the new law?
Yes. Under the new law, uninsured and underinsured motorist (UM/UIM) coverage must match your bodily injury liability limits — which means UM/UIM now also carries a minimum of $35,000 per person and $70,000 per accident on standard policies. This is a meaningful protection upgrade for NJ drivers, given how many vehicles on state roads were previously carrying only bare-minimum coverage. Learn more about bodily injury liability coverage and how limits work.