New Jersey requires uninsured motorist coverage on every auto policy, and you cannot waive it without the insurer's written consent

New Jersey's uninsured motorist statute (N.J.S.A. 39:6-94) mandates that every auto insurance policy sold in the state include uninsured motorist (UM) coverage. This is not optional. Your insurer must offer it, and you must either accept it or formally reject it in writing. Even if you reject it, the insurer can refuse to do business with you — they are not required to sell you a policy without UM coverage.

The law exists because roughly one in eight drivers on New Jersey roads carry no insurance at all. If an uninsured driver hits you and causes injury, your own UM coverage pays your medical bills, lost wages, and pain and suffering up to your policy limit. Without it, you would have to sue the other driver personally, which often yields nothing because they have no assets.

New Jersey also requires underinsured motorist (UIM) coverage, which works the same way but applies when the at-fault driver's insurance limit is too low to cover your damages. If you are hit by someone with only $15,000 in liability coverage and your injuries cost $50,000, your UIM coverage fills the gap.

Key Takeaways

  • New Jersey law requires every auto policy to include uninsured motorist coverage; you cannot buy a policy without it unless you sign a written rejection form.
  • UM coverage pays your medical expenses, lost income, and pain and suffering if an uninsured driver injures you, up to the limit you choose.
  • Underinsured motorist (UIM) coverage is also mandatory and covers you when the at-fault driver's insurance is insufficient to pay your full damages.
  • Your UM/UIM limit can be lower than your liability limit, but New Jersey sets a minimum: you must carry at least $15,000 per person and $30,000 per accident.
  • If you reject UM coverage in writing, you lose the right to recover from your own insurer if hit by an uninsured driver, though you can still sue the other driver directly.

Minimum coverage amounts and how to choose your limit

New Jersey law sets a floor: your UM/UIM coverage must be at least $15,000 per person and $30,000 per accident. This is the absolute minimum the state allows. Many drivers choose higher limits — $25,000 per person and $50,000 per accident, or $50,000 per person and $100,000 per accident — because medical bills and lost wages can exceed the minimum quickly.

Your UM/UIM limit does not have to match your liability limit. You could carry $100,000 in liability (what you owe if you injure someone else) but only $15,000 in UM coverage (what your insurer pays if someone uninsured injures you). However, most insurance agents recommend matching them or coming close, because if you cause a serious accident, you want the same protection you are offering others.

The cost difference between the minimum and a higher limit is usually small — often $10 to $30 per year — because uninsured motorist claims are less common than regular liability claims. Your insurer can tell you the exact premium for each option when you quote a policy.

What happens if you reject uninsured motorist coverage

You can reject UM/UIM coverage, but only by signing a written form provided by your insurer. Verbal rejection does not count. The form must clearly state that you understand you are giving up the right to recover from your own insurance company if an uninsured or underinsured driver hits you.

If you reject coverage and then are hit by an uninsured driver, you cannot file a claim with your own insurer. Your only option is to sue the uninsured driver directly in civil court. In practice, this often means recovering nothing, because uninsured drivers typically have no money or assets to collect from. A judgment against them sits unpaid.

You can change your mind later. If you rejected UM coverage last year and now want it back, contact your insurer and ask to reinstate it. They will add it to your policy, usually effective when ready or on your next renewal date. There is no penalty for reinstating coverage you previously rejected.

Stacking and how it affects your recovery

Stacking is a rule that lets you combine UM coverage from multiple vehicles or policies you own. If you own two cars, each with $25,000 in UM coverage, you can stack them to recover up to $50,000 if an uninsured driver injures you. New Jersey allows stacking unless your policy explicitly prohibits it.

Stacking matters most in serious injury cases where damages exceed a single vehicle's UM limit. If you are hit by an uninsured driver and your injuries cost $60,000, and you own two cars with $25,000 UM coverage each, stacking lets you recover the full $50,000 from your policies. Without stacking, you would recover only $25,000 from one vehicle's policy.

Check your policy documents to see whether stacking is allowed. Some policies prohibit it to keep premiums lower. If your policy is silent on stacking, New Jersey law presumes it is allowed. If you own multiple vehicles and want the option to stack, ask your insurer whether your policies permit it before you buy.

How UM coverage interacts with your liability insurance

Your UM coverage and your liability coverage are separate. Liability pays when you injure someone else; UM pays when someone uninsured injures you. They do not offset each other, and carrying one does not reduce the other.

However, if you are partially at fault for an accident, New Jersey's comparative negligence rule applies to UM claims just as it does to liability claims. If you are 20 percent at fault and the uninsured driver is 80 percent at fault, your UM coverage pays 80 percent of your damages. If you are more than 50 percent at fault, you recover nothing under UM coverage.

Your UM insurer will investigate the accident and may dispute your account of who was at fault. If you disagree with their finding, you have the right to sue your own insurer in court. This is rare but happens when liability is genuinely unclear — for example, in a multi-vehicle intersection collision.

The difference between UM and UIM coverage in practice

Uninsured motorist (UM) coverage applies when the other driver has zero insurance. Underinsured motorist (UIM) coverage applies when the other driver has insurance but not enough to cover your damages. Both are mandatory in New Jersey, and both work the same way: your insurer pays the difference between what the other driver's insurance covers and your actual damages, up to your UIM limit.

Example: You are hit by a driver with $15,000 in liability coverage. Your medical bills and lost wages total $40,000. The other driver's insurer pays their $15,000 limit. Your UIM coverage then pays up to $25,000 more (if your UIM limit is at least $40,000). If your UIM limit is only $15,000, you recover $15,000 from the other driver's insurer plus $15,000 from your own UIM coverage, leaving $10,000 uncovered.

In practice, UIM claims are more common than UM claims because many drivers carry the state minimum liability ($15,000 per person), which is often too low for serious injuries. UIM coverage protects you against this gap.

When your UM claim might be denied

Your insurer can deny a UM claim if they determine the other driver was not actually uninsured, if you failed to report the accident promptly, or if you did not cooperate with their investigation. They can also deny the claim if they find you were more than 50 percent at fault for the accident.

The most common denial reason is a dispute over fault. If the uninsured driver fled the scene and there are no witnesses, your insurer may conclude they cannot prove the other driver caused the accident. You can challenge this denial by providing additional evidence — police report, medical records showing injury timing, photos of vehicle damage — or by filing a complaint with the New Jersey Department of Banking and Insurance if you believe the denial was unreasonable.

If your insurer denies your UM claim, you have the right to sue them in court. You can also request that a neutral third party (an arbitrator) hear the dispute, depending on your policy language. Many UM disputes are resolved through arbitration rather than litigation because it is faster and less expensive.

Frequently Asked Questions

Can I buy a New Jersey auto policy without uninsured motorist coverage?

No, unless you sign a written rejection form provided by your insurer. Even then, the insurer can refuse to sell you a policy. If you do reject UM coverage, you can reinstate it later by contacting your insurer, usually with no penalty.

What is the difference between UM and UIM coverage?

UM covers you if the other driver has no insurance at all. UIM covers you if the other driver has insurance but not enough to pay your full damages. Both are mandatory in New Jersey and work similarly — your insurer pays the gap between what you are owed and what the other driver's insurance covers.

If I am hit by an uninsured driver, do I have to use my UM coverage or can I sue them directly?

You can do either. You can file a UM claim with your own insurer, or you can sue the uninsured driver in court. Most people file a UM claim first because it is faster and does not require hiring a lawyer. If the claim is denied, you can then sue the driver directly, though they usually have no money to collect.

Does my UM coverage explore if I am hit while riding my bike or walking?

It depends on your policy. Some UM policies cover you only while you are in or entering a vehicle. Others extend to pedestrians and cyclists hit by uninsured drivers. Check your policy or ask your insurer whether you have coverage as a pedestrian or cyclist.

What happens if the uninsured driver is a family member living in my house?

New Jersey law excludes household members from UM coverage in most cases. If an uninsured family member living with you causes an accident, your UM coverage typically does not explore. This is called the "household exclusion." Check your policy to see if it includes this exclusion and whether any exceptions explore.