NJ Auto Insurance Minimums Just Changed Again: What the 2026 35/70/25 Law Means

New Jersey completed a decade-long process of updating its auto insurance liability minimums on January 1, 2026 — raising the required bodily injury limits for the first time since a 2023 phase-in began. The new standard, 35/70/25, makes New Jersey one of the few states to have enacted a phased liability increase in recent years, and it affects every standard auto policy issued or renewed in the state on or after January 1, 2026. For Property and Casualty producers selling personal or commercial auto in New Jersey, understanding the mechanics and the history of this change is both a compliance requirement and a client conversation that is happening right now.

The Three-Phase History of NJ Auto Minimums

New Jersey's auto liability minimum history is a study in regulatory inertia followed by significant reform. The original minimum — $15,000 per person / $30,000 per accident for bodily injury — had been in place since 1973. Bill S482, signed into law as P.L.2022, c.87, created a two-phase increase tied to policy issuance and renewal dates:

The property damage minimum increased significantly in Phase 1 (from $5,000 to $25,000) and held steady at $25,000 in Phase 2. The bodily injury limits are the primary change in 2026 — $35,000 per person and $70,000 per accident.

These minimums apply to all standard auto insurance policies. The basic policy, available only to qualifying low-income drivers under N.J.S.A. 39:6A-3.1, is not subject to the same minimum requirements and is governed by separate provisions.

How the Change Was Implemented

DOBI Bulletin 25-06 directed all private passenger auto insurers to file updated rates by September 1, 2025 to accommodate the new minimums. Commercial auto insurers had until January 30, 2026. Insurers were required to update policy forms, coverage selection forms, and Buyer's Guides to reflect the new limits.

Existing policyholders with minimum-limit policies had their coverage automatically increased to the Phase 2 minimums upon policy renewal on or after January 1, 2026. Insurers were permitted to increase limits without obtaining a new signed coverage selection form from the policyholder for the purpose of complying with the statutory increase. DOBI directed insurers to notify policyholders of the changes in their renewal materials.

What This Means for UM/UIM Coverage

Uninsured and Underinsured Motorist (UM/UIM) coverage in New Jersey is required to track liability minimums. Because the bodily injury liability minimum increased to 35/70, UM/UIM coverage minimums also increased to match — unless the policyholder affirmatively selected lower UM/UIM limits, which NJ law permits in certain circumstances.

This linkage matters for producers: a client who has been carrying 25/50 UM/UIM coverage and renews after January 1, 2026 will see their UM/UIM minimums automatically adjusted to 35/70 unless they take action. Clients who hold umbrella policies also need to review whether their base auto limits still trigger the umbrella properly after the increase.

The Basic Policy: What Did Not Change

New Jersey's basic auto policy — available only to drivers who qualify based on income and who have no other assets — was explicitly excluded from P.L.2022, c.87. The basic policy continues to provide only minimal liability coverage and does not meet the standard 35/70/25 minimum. Producers who work with clients on the basic policy need to understand this distinction clearly, as it creates a significant coverage gap compared to the standard policy.

Client Conversations Producers Should Be Having Now

The 2026 minimum change creates several immediate advisory opportunities for P&C producers:

Umbrella policy alignment: Clients who carry umbrella coverage should confirm that their underlying auto liability limits still meet the umbrella carrier's required underlying limits. Many umbrella policies require at least 100/300 in underlying auto coverage — the state minimum change does not directly affect umbrella triggers, but a review conversation is warranted.

UM/UIM adequacy: The minimum increase brings UM/UIM to 35/70 — still well below what most attorneys and financial planners recommend for drivers in a high-density, high-litigation state like New Jersey. A 35/70 UM/UIM policy provides limited protection in a serious accident. Producers should discuss higher limits with clients who are carrying minimum coverage.

Commercial auto implications: Commercial auto policies issued or renewed on or after January 1, 2026 are subject to the same 35/70/25 minimum. Fleet operators and businesses with company vehicles that were previously carrying 25/50 minimums needed updated filings and policy adjustments at renewal.

Frequently Asked Questions

What are New Jersey's current auto insurance minimum liability requirements as of 2026?

Effective January 1, 2026, New Jersey's minimum auto liability requirements for standard policies are $35,000 per person and $70,000 per accident for bodily injury, and $25,000 per accident for property damage — commonly written as 35/70/25. These minimums apply to all standard auto insurance policies issued or renewed on or after that date. The basic policy, available only to qualifying low-income drivers, is not subject to these minimums and is governed by separate statutory provisions. New Jersey is the only state that completed a planned phased liability minimum increase for 2026, making it important for producers working in the state to have the current figures memorized and ready for client conversations.

Did existing policyholders have to do anything to get the new minimum limits?

No. DOBI directed insurers to automatically increase the liability limits of existing minimum-coverage policyholders to the Phase 2 minimums upon policy renewal on or after January 1, 2026. Insurers were permitted to make this adjustment without obtaining a new signed coverage selection form from the policyholder. Policyholders who were already carrying limits above the minimum were unaffected by the change — the minimum increase only affected those whose policies were written at the prior Phase 1 minimums of 25/50/25. Insurers were required to notify policyholders of the change in their renewal materials. Clients who renewed after January 1 without reviewing their policy documents may be unaware of the adjustment.

Why did New Jersey's auto insurance minimums increase in two phases rather than all at once?

The phased approach was built into P.L.2022, c.87 (Bill S482) to give insurers time to update rate filings, policy forms, and actuarial models without disrupting the market. A single large jump in minimum limits would have required all NJ auto insurers to refile rates simultaneously and could have produced significant premium shock for minimum-coverage policyholders. The two-phase structure — Phase 1 in 2023, Phase 2 in 2026 — allowed insurers to adjust incrementally and policyholders to absorb premium increases over three years rather than all at once. New Jersey's original minimums had not been updated since 1973, so the increase, while significant in percentage terms, was arguably overdue from a coverage adequacy standpoint.

How does New Jersey's 35/70/25 minimum compare to neighboring states?

New Jersey's 2026 minimums are broadly in line with New York (25/50/10 minimum, though NY is currently under discussion for updates) and higher than Pennsylvania (15/30/5). However no-fault states like New Jersey have a different coverage structure than at-fault states — the presence of mandatory PIP coverage ($15,000 per person under a standard NJ policy) means that the liability minimum comparison is not purely apples-to-apples. NJ drivers have first-party medical coverage through PIP that PA drivers (an at-fault state) do not have by default. In practical terms, NJ's 35/70 bodily injury minimums are still considered modest by most insurance professionals for a state with high population density, high litigation rates, and high medical costs.

Does the 2026 minimum increase affect commercial auto policies in New Jersey?

Yes. The Phase 2 minimums apply to all standard auto insurance policies in New Jersey — personal and commercial — issued or renewed on or after January 1, 2026. DOBI required commercial auto insurers to file updated rates by January 30, 2026 to accommodate the new minimums. Commercial auto policyholders who were carrying 25/50 limits prior to renewal needed their policies updated to the 35/70 bodily injury minimum. Commercial fleet operators, small businesses, and contractors with company vehicles who purchased or renewed policies in early 2026 should confirm with their producer that their policies reflect the current statutory minimums and that any certificates of insurance issued after January 1, 2026 reflect updated limits.

The 2026 minimum change is the most significant update to NJ auto liability requirements since the 2023 phase-in — and it represents the completion of a multi-year reform that brought New Jersey's coverage floor substantially closer to the actual cost of a serious auto accident in one of the country's most densely populated states.

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