New Jersey completed a two-phase overhaul of its mandatory auto insurance minimums on January 1, 2026. All NJ policies issued or renewed this year must carry at least $35,000/$70,000 in bodily injury liability and $25,000 in property damage. If your policy renewed after January 1, your insurer already bumped your limits — and your premium.
- New NJ minimum: 35/70/25 — bodily injury up from 25/50, property damage unchanged at $25k
- Uninsured/underinsured motorist (UM/UIM) limits automatically increased to match
- Insurers are required by law to notify you of the change at renewal
- About 1.2 million NJ drivers (30%) were at the old minimums — expect $100–$200 more per year
- NJ is already seeing a 10.46% projected rate increase in 2026 — highest in the nation
What Changed on January 1, 2026
New Jersey drivers now face higher mandatory auto insurance minimums — the result of a two-phase legislative overhaul that started in 2023. The final phase, effective January 1, 2026, raises the state's required bodily injury liability from $25,000 per person and $50,000 per accident to $35,000 per person and $70,000 per accident. Property damage liability stays at $25,000.
The change stems from P.L. 2022, c.87, a law enacted to modernize coverage limits that had remained largely unchanged for decades. New Jersey's Department of Banking and Insurance (DOBI) issued Bulletin No. 25-06 directing all admitted and surplus lines insurers to update their rates, forms, and policyholder notifications before the January deadline.
What This Means for Your Policy
If your policy renewed on or after January 1, 2026, your insurer was legally required to bring your coverage up to the new minimums — whether or not you asked. You should see the updated limits reflected on your declarations page. Critically, your uninsured/underinsured motorist (UM/UIM) coverage also increased automatically since NJ law ties those limits to the bodily injury liability minimum.
Personal Injury Protection (PIP) is not affected. The $15,000 minimum for medical benefits remains unchanged.
For NJ drivers who were carrying the old minimum limits, the coverage bump translates to real money. Roughly 1.2 million vehicle owners — about 30% of New Jersey drivers — were at the previous state minimum, according to insurance industry estimates. Those drivers can expect their premiums to rise by $100 to $200 per vehicle per year from the mandate alone, on top of the broader 10.46% average rate increase projected statewide in 2026.
Log into your insurer's app or website and pull your current declarations page. Look for bodily injury limits of at least $35,000/$70,000. If you still see $25,000/$50,000, contact your agent immediately — your carrier may have failed to update your policy as required.
The Bigger Picture: Why NJ Raised Its Minimums
New Jersey's old minimum of $25,000 per person dated back decades, when a hospital stay cost a fraction of what it does today. A moderately serious car accident — a broken femur, a few nights in the ICU — can easily exceed $100,000 in medical bills. A driver who hits you and only carries the old $25,000 minimum leaves you on the hook for $75,000 or more unless you have robust underinsured motorist (UIM) coverage on your own policy.
New Jersey isn't alone in updating its minimums. California raised its minimum from 15/30/5 to 30/60/15 in January 2025 — the first increase in 56 years — with a further increase to 50/100/25 planned for 2035. The trend reflects a nationwide recognition that minimums set in the 1970s and 1980s no longer cover the real cost of accidents.
For NJ drivers, the change is straightforward consumer protection — but it comes at a cost. New Jersey is already one of the most expensive states for auto insurance. The average full coverage premium hit $249 per month in 2026, according to Bankrate — above the national average of $208 per month. Layering mandatory coverage increases onto an already-rising market is straining household budgets.
"If you are hit by a driver who only carries the state minimum, and your medical bills total $100,000, you could face a $65,000 shortfall — unless you carry high UIM coverage on your own policy." — NJ insurance attorneys frequently advise clients to carry well above the legal minimum.
The Basic Policy Trap: What to Avoid
New Jersey has a unique "Basic Policy" option that allows drivers to purchase a stripped-down plan with $0 in bodily injury liability (though $10,000 can be added as an option). Historically, some drivers chose this to save on premiums. Insurance advisors are now more strongly urging drivers to avoid the Basic Policy — it offers minimal protection in a litigious state where a single accident can result in a lawsuit exceeding hundreds of thousands of dollars.
If you're on a Basic Policy, talk to an agent before your next renewal. The few dollars saved per month are rarely worth the financial exposure.
What You Should Do Now
Verify Your New Limits
Pull your declarations page from your insurer's website or app. Confirm your bodily injury liability shows at least $35,000/$70,000. If it still shows the old limits, call your agent right away.
Review Your UM/UIM Coverage
Uninsured and underinsured motorist limits rose alongside liability. But consider going higher — the legal minimum still leaves gaps if you're hit by a driver with significant assets to protect. Experts often recommend matching your liability limits with your UM/UIM coverage.
Consider Going Above the Minimum
The new 35/70/25 is a floor, not a recommendation. If you own a home, have savings, or earn a regular income, your assets are exposed if you cause an accident that exceeds your coverage. Talk to your agent about 100/300/100 or adding an umbrella policy.
Shop Around Before Your Renewal
Rates are rising across NJ in 2026. With premiums averaging $249/month, even a 5% savings by switching carriers is worth $150+ per year. Get quotes from at least three carriers before your renewal date.
Ask About Discounts to Offset the Increase
Before your renewal, ask your current insurer about bundling discounts, telematics programs (up to 30% savings for safe drivers), good driver credits, and loyalty discounts. Carriers are competing for customers, even in a rising-rate environment.
Looking Ahead
New Jersey's two-phase minimum increase is now complete. No further mandatory increases are scheduled at this time — but the underlying cost pressures driving rates up haven't gone away. Auto repair costs, medical inflation, and litigation trends continue to push premiums higher, making NJ one of the most challenging auto insurance markets in the country.
Legislators and consumer advocates are watching how the market responds to the combined impact of the new minimums and the 10.46% projected rate increase. If affordability concerns grow, there may be renewed pressure on the state to expand access to lower-cost options or establish a reformed basic policy structure. For now, the best strategy for NJ drivers is to review their coverage carefully, shop competitively, and carry more than the bare minimum wherever possible.
Frequently Asked Questions
No — insurers are legally required to update your coverage to the new minimums at renewal without you needing to request it. However, you should verify the change on your declarations page. If you already carry higher limits, nothing changes for you.
Two things are happening at once: the mandatory coverage increase (which costs more to provide) and broader 2026 rate increases averaging 10.46% statewide. Both factors show up in your renewal. NJ drivers who were at the old state minimums can expect to pay $100–$200 more per year just from the mandatory coverage change.
Yes. New Jersey law requires UM/UIM limits to track your bodily injury liability limits. So the new UM/UIM minimum is also $35,000 per person and $70,000 per accident. This is automatic — your insurer will apply it at renewal.
New Jersey's Basic Policy is a stripped-down option that historically allowed $0 in bodily injury liability (with $10,000 optionally added). The new 35/70/25 minimum applies to the standard policy. Insurance professionals strongly advise against the Basic Policy for most drivers — the financial exposure from an at-fault accident far outweighs the premium savings.
Yes — New Jersey is the only state with a mandatory minimum increase taking effect in 2026, according to Insurance.com. California raised its minimums in January 2025 (its first increase in 56 years). Other states are expected to follow as outdated minimums face increasing scrutiny from lawmakers and consumer advocates.
- New Jersey DOBI Bulletin No. 25-06 — 2026 Auto Insurance Minimum Limit Requirements
- New Jersey DOBI Bulletin No. 22-09 — Phase 1 Auto Minimum Increase (2023)
- SterlingRisk — Client Alert: New Jersey Auto Liability Minimums Increase January 1, 2026
- ReSource Pro Compliance — New Jersey Raises Minimum Auto Insurance Limits Effective 2026
- Bankrate — Average Cost of Car Insurance in New Jersey for 2026
- Insurance.com — Minimum Car Insurance Requirement Changes for 2026
- TAPinto — NJ Auto Insurance Premiums Projected to Rise 10.46% in 2026