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The choices on your declarations page — PIP limit, right to sue, UM/UIM — decide who pays your medical bills and whether you can recover for pain and suffering. Here is how New Jersey’s no-fault system works in 2026.
Available 24/7(855) 529-0030
Reviewed by Ihab Ibrahim, Esq. | Ibrahim & Ibrahim Law Firm | Updated
New Jersey is a no-fault state. After a car accident, your own Personal Injury Protection (PIP) coverage pays your medical bills first, no matter who caused the crash. Whether you can then sue the at-fault driver for pain and suffering depends largely on a box you checked when you bought the policy. This guide walks through the pieces that matter most once someone is hurt. For what happens next, see our guides to personal injury medical treatment in New Jersey and the life of a personal injury case.
As of January 1, 2026, a New Jersey Standard auto policy must carry at least $35,000 per person / $70,000 per accident in bodily injury liability and $25,000 in property damage. PIP defaults to $250,000 unless you choose a lower limit ($15,000, $50,000, $75,000 or $150,000). Most drivers choose the “limitation on lawsuit” option, which lets you sue for pain and suffering only if your injury meets one of six statutory categories, such as a permanent injury or displaced fracture.
Your own PIP coverage pays reasonable and necessary treatment, subject to your deductible, co-pay and the insurer’s Decision Point Review rules.
With the limitation on lawsuit option, you must prove a qualifying injury with objective medical evidence to recover non-economic damages.
If the at-fault driver has minimum limits, your own Underinsured Motorist (UIM) coverage may be the only way to reach full value.
Under P.L.2022, c.87, New Jersey raised its minimum liability limits in two steps (DOBI Bulletin 25-06):
| Coverage | From Jan. 1, 2023 | From Jan. 1, 2026 |
|---|---|---|
| Bodily injury, per person | $25,000 | $35,000 |
| Bodily injury, per accident | $50,000 | $70,000 |
| Property damage | $25,000 | $25,000 |
Uninsured and underinsured motorist minimums rise along with these limits. The increases do not apply to the Basic policy. Minimums are rarely enough for a serious injury — many injury lawyers recommend $100,000/$300,000 or more, with matching UM/UIM.
The Standard policy is what most New Jersey drivers carry. It includes liability, PIP, UM/UIM, and optional collision and comprehensive coverage.
The Basic policy (DOBI overview) is a low-cost option with $5,000 in property damage liability and $15,000 in PIP per person per accident — rising to $250,000 for certain permanent or significant brain or spinal cord injuries, disfigurement, or treatment at a trauma center. Bodily injury liability of $10,000 is optional, there is no UM/UIM coverage, and Basic policyholders automatically have the limited right to sue. A Basic policy can leave you personally exposed if you injure someone.
New Jersey also offers the Special Automobile Insurance Policy (SAIP), the “dollar-a-day” policy for drivers enrolled in federal Medicaid with hospitalization. It costs $365 a year and covers emergency treatment and serious brain or spinal cord injuries up to $250,000, with a $10,000 death benefit, but has no liability coverage (DOBI SAIP page).
PIP is the heart of New Jersey’s no-fault system. Under N.J.S.A. 39:6A-4.3, PIP medical coverage is $250,000 per person per accident unless you choose a lower option of $15,000, $50,000, $75,000 or $150,000. Even if you chose a lower limit, $250,000 remains available for certain catastrophic injuries.
According to the 2026 DOBI Buyer’s Guide, Standard policies have a PIP deductible of $250 to $2,500, plus a 20% co-payment on medical expenses between the deductible and $5,000. You may also elect to make your health insurance primary for PIP, which lowers your premium but means your health plan pays first — along with its networks, referrals and co-pays. Medicare and Medicaid cannot be made primary.
PIP also includes income continuation, essential services, death and funeral benefits, subject to the limits on your policy.
This is the single most important choice for an injured driver. With the no limitation on lawsuit option (sometimes called the “zero threshold”), you can sue the at-fault driver for pain and suffering for any injury. With the cheaper limitation on lawsuit option — the “verbal threshold” of N.J.S.A. 39:6A-8(a) — you can recover non-economic damages only if the injury results in:
A physician must certify the injury based on objective clinical evidence. The New Jersey Supreme Court held in DiProspero v. Penn, 183 N.J. 477 (2005), that you do not need to also prove a “serious life impact.” The threshold makes consistent, documented treatment essential — see our treatment guide.
The threshold limits pain-and-suffering claims only. Economic losses above your PIP — such as unpaid medical bills or lost wages beyond your PIP limits — can still be pursued.
Uninsured Motorist (UM) coverage protects you when the at-fault driver has no insurance or flees the scene. Underinsured Motorist (UIM) coverage steps in when the at-fault driver’s liability limits are too low to cover your damages. On a Standard policy, UM/UIM is available up to your own liability limits. UIM claims have strict notice and consent rules — you generally must notify your own insurer before settling with the at-fault driver.
Crashes in busy corridors like Journal Square are common — see our look at the most dangerous intersections in Journal Square. Arabic-speaking clients can use our Arabic car accident settlement estimator.
We review your declarations page and the at-fault driver’s coverage at the very start of a case, because they shape every decision that follows.
Find your declarations page and check two lines: your PIP limit and whether you have “limitation on lawsuit.” If you are not sure what you have, send it to us — we will explain it at no charge. Call (855) 529-0030, 24/7.
A pedestrian struck by a car usually looks first to their own household auto policy for PIP. If no one in the household has auto insurance, the striking vehicle’s policy may provide PIP.
When PIP denies treatment, disputes often go to binding arbitration administered for the State by Forthright. Deadlines and medical support matter.
A Standard policy must carry at least $35,000 per person and $70,000 per accident in bodily injury liability and $25,000 in property damage liability, plus PIP. The Basic policy has lower, different minimums.
Yes. Your own PIP coverage pays your medical bills after an accident regardless of fault. You can still sue the at-fault driver for pain and suffering if you have the no limitation on lawsuit option, or if your injury meets the verbal threshold.
It means you can recover pain-and-suffering damages only if your injury fits one of six categories in N.J.S.A. 39:6A-8(a): death, dismemberment, significant disfigurement or scarring, displaced fracture, loss of a fetus, or a permanent injury supported by objective medical evidence.
Lower PIP limits save premium, but serious injuries can exhaust $15,000 quickly, leaving your health insurance or you to pay. Consider your health coverage and household before lowering PIP. This is general information, not financial advice.
Yes. If you elected health insurance as primary, your health plan pays first under its rules, and PIP pays what remains up to your PIP limit. Medicare and Medicaid cannot be made primary.
Your Uninsured Motorist coverage can compensate you as if the at-fault driver had insurance, up to your UM limits. Report the crash to police and your insurer promptly.
