As many as 1.2 million New Jersey drivers will begin paying more for their auto insurance in the new year under a bill Gov. Phil Murphy signed into law that increased the minimum amount of liability insurance drivers need to have in the state.
Drivers affected by the controversial law can expect to pay around $125 more a year per car for insurance, according to industry officials. It goes into effect on New Year’s Day.
The new law hiked the minimum amount of liability coverage previously allowed from $15,000 to $25,000. Baked into the legislation is another increase in minimum liability coverage to $35,000 in 2026, so drivers can expect to pay even more in three years.
Industry officials said at the time the bill was debated it would affect 1.1 million drivers. But the state’s Department of Banking and Insurance, which has oversight over insurers, said there’s an estimated 1.1 million to 1.2 million vehicles with the current minimum coverage.
Overall, there are 5,970,000 private passenger vehicles insured in New Jersey, according to DOBI.
Proponents of the law argued that victims of crashes haven’t always been able to have their medical bills covered in full because of the low coverage option.
Gary LaSpisa, the vice president of the Insurance Council of New Jersey, said at the time the average settlement for accidents with injuries was $18,000. The group supported the hike on the minimum coverage based on the gap in what’s allowed and the average settlement rate in the state, but it ultimately withdrew support for the bill because of the automatic increase in 2026.
The measure was highly controversial when it was debated in Trenton in June.
New Jersey’s most powerful state lawmaker, state Senate President Nicholas Scutariintroduced more than a half-dozen bills that opponents