For auto policies issued or renewed on or after January 1, 2026, New Jersey has begun implementing the second phase of a major auto insurance reform that increases the state’s minimum required coverage levels for many policies. For many New Jersey drivers and accident victims, this matters because the amount of insurance coverage available is often a major factor in how an injury claim is evaluated and resolved.
If you were recently injured in a motor vehicle accident, we want you to understand two important points right away. First, higher minimum insurance limits can increase the pool of coverage available in many cases. Second, higher limits do not automatically guarantee a higher settlement. Liability, medical proof, damages, and the specific insurance policies involved still determine the outcome. This article explains what changed, why it matters, and what steps we recommend if an insurer is still denying or undervaluing your claim.
At Cohen & Riechelson, we have represented injured individuals in Mercer County and throughout New Jersey for decades. We follow these legislative changes closely because our clients are the ones who feel the real-world consequences when insurance coverage falls short.
What Changed in 2026 and Who the New Limits Apply To
New Jersey’s insurance reform is tied to when an auto policy is issued or renewed. The updated minimum limits apply to policies issued or renewed on or after January 1, 2026, and they apply to many standard New Jersey private passenger auto policies (but not to every type of policy).
This timing matters. If your policy renewed earlier, it may still fall under a prior phase until your next renewal. When we review coverage for our clients, we pay close attention to policy periods and renewal dates because they can directly affect which minimum limits apply to a claim.
The New Math for New Jersey Auto Insurance in 2026
Under the 2026 phase of the reform, the minimum liability limits for many standard auto insurance policies increase to:
- $35,000 for bodily injury to one person in an accident
- $70,000 total for bodily injury per accident when more than one person is injured
- $25,000 for property damage per accident
To understand why this matters, it helps to look at how New Jersey arrived here.
Before the reform, many drivers carried minimum liability limits commonly described as 15/30 for bodily injury, and property damage requirements were significantly lower than they are today.
For policies issued or renewed on or after January 1, 2023, and before January 1, 2026, the first phase of the reform increased bodily injury limits to 25/50 and raised property damage coverage to $25,000.
The second phase raises bodily injury limits again to 35/70, while property damage coverage remains at $25,000. This represents a meaningful increase in the minimum required baseline, particularly in accidents involving surgery, hospitalization, extended rehabilitation, or permanent injuries.
Higher Minimum Limits Matter for Injury Claims, But They Don’t Decide the Outcome
In many cases, settlement discussions start with three basic questions:
- Who is legally responsible for the crash?
- What injuries and losses can be supported by medical and financial documentation?
- How much insurance coverage is available?
When an at-fault driver carries low insurance limits, insurers often try to resolve the claim within those limits, even when the injuries are serious. Higher minimum limits can raise the available coverage baseline for many policies issued or renewed on or after January 1, 2026, which can influence negotiations in some cases.
That said, this reform is not a guaranteed windfall. Insurers may still dispute liability, argue that treatment was unrelated to the crash, claim an injury was preexisting, or minimize the impact of pain and limitations. While the available coverage may be higher, the insurance company’s approach to defending claims has not changed.
It is also important to remember that liability coverage is only one part of the insurance picture. In many cases, New Jersey’s no-fault system means your own Personal Injury Protection coverage generally pays medical expenses regardless of fault, subject to the policy terms and the facts of the crash.
Uninsured and Underinsured Motorist Coverage Also Matters
Another important part of this reform involves uninsured motorist and underinsured motorist coverage, which often (but not always) tracks bodily injury liability limits unless a lower amount is affirmatively selected. These coverages can be critical when the at-fault driver has no insurance or does not carry enough insurance to fully compensate someone who is seriously injured.
In cases involving significant injuries, we often review our client’s UM and UIM coverage early. These coverages may provide an additional path to recovery when the other driver’s policy is insufficient. Your actual UM and UIM protection still depends on what coverage you purchased, which is why reviewing the policy details is so important.
The Basic Policy Issue and Why It Might Limit Recovery
Even with increased standard minimums, New Jersey still allows drivers to purchase a Basic Policy. The Basic Policy is intended as a lower-cost option, but it can significantly limit the coverage available after a crash.
One major issue is bodily injury liability coverage. A Basic Policy may be written with or without optional bodily injury liability coverage, and when that option is selected, the limit is $10,000 as defined by statute.
If you are hit by a driver with a Basic Policy, there may be little or no bodily injury coverage available. In those situations, we often look beyond the at-fault driver’s policy to determine whether other sources of coverage may apply, depending on the facts of the accident.
The Verbal Threshold Still Applies in 2026
The increase in minimum insurance limits does not eliminate New Jersey’s Limitation on Lawsuit option, commonly known as the verbal threshold. If the verbal threshold applies, you generally cannot recover pain and suffering damages unless your injury falls into one of the recognized serious injury categories.
These categories include:
- Death
- Dismemberment
- Significant disfigurement or significant scarring
- Displaced fractures
- Loss of a fetus
- Permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement
This is why medical documentation remains critical. It is not enough to report pain alone. The claim must be supported by medical evidence that meets New Jersey’s legal standard.
What to Do if Your Claim Is Denied or the Offer Is Too Low
Even with these updated minimum limits, insurers may still deny claims or undervalue them for familiar reasons. They may argue that:
- You were partly at fault
- Your injuries were not caused by the crash
- You had a prior condition
- The treatment was excessive
- Your limitations are not supported by objective findings
New Jersey follows a comparative negligence system. A person may still recover damages if their negligence was not greater than the negligence of the party or parties against whom recovery is sought, although any recovery may be reduced by the percentage of fault assigned. If a person is found more than 50 percent at fault, recovery may be barred in many negligence cases.
If you are facing a denial or a low offer, we generally recommend:
- Seeking consistent medical treatment and following up with specialists
- Keeping detailed documentation of diagnoses, imaging, treatment plans, and restrictions
- Avoiding recorded statements or broad medical authorizations without guidance
- Preserving evidence early, including photos, witness information, and crash reports
- Having all applicable insurance policies reviewed to ensure coverage is not misunderstood or understated
How We Evaluate Damages to Reflect the Full Impact of the Crash
When we evaluate an injury claim, we look beyond the bills you have today. A fair resolution should reflect the full scope of losses, which may include:
- Future medical care, including therapy, pain management, specialist treatment, and potential procedures
- Lost wages and loss of future earning capacity when supported by evidence
- Pain and suffering when legally available based on the applicable tort option and facts
- Loss of enjoyment of life when supported by the evidence
New Jersey’s insurance reform can increase available coverage in many cases. Our role is to build a claim that is well-supported, clearly presented, and prepared for negotiation or litigation when necessary.
Why Local Experience Still Matters in New Jersey Auto Cases
New Jersey auto insurance law is complex, and the reform adds timing issues that matter in real cases, including whether a policy was issued or renewed on or after January 1, 2026.
Local process also matters. When an insurer disputes liability, causation, or damages, the outcome often depends on how well the evidence is developed and how thoroughly the case is prepared.
At Cohen & Riechelson, our team has been part of this community since 1972. We understand the local courts, the insurance landscape, and what our clients need after a crash: clear answers, responsive guidance, and a plan forward.
Contact Cohen & Riechelson for a Consultation About Your New Jersey Auto Accident Claim
If you or a loved one was injured in a car accident in New Jersey, time matters. Most personal injury actions must be filed within two years of the date of the injury, although exceptions may apply depending on the circumstances.
We offer a free, no-obligation consultation to review what happened, discuss coverage issues, and explain your options. We handle many injury cases on a contingency fee basis, which generally means attorney’s fees are paid only if there is a recovery. The specific terms and costs can be discussed during the consultation. Contact us today to see how we can help.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. If you need legal advice about your situation, contact a lawyer directly.