If your car is registered or mainly garaged in New Jersey, the law generally requires you to buy a New Jersey auto insurance policy. Those who fail to do so may be barred from obtaining compensation for injuries suffered in an accident.
New Jersey’s Compulsory Insurance Law requires you to obtain a New Jersey auto insurance policy for two types of vehicles:
(1) vehicles registered in New Jersey (vehicles with a New Jersey license plate) and
(2) vehicles that are “principally garaged” in New Jersey, even if those vehicles are registered in other states.1
A vehicle is “principally garaged” in “the physical location where [the] automobile is primarily or chiefly kept or where it is kept most of the time.”2 The purpose of the Compulsory Insurance Law is to prevent New Jersey residents from seeking to get around New Jersey’s minimum insurance requirements.3
In 2015, the New Jersey Legislature passed a law4 to criminalize a type of insurance fraud known as “reverse rate evasion.” The law prohibits people from making false statements about their residency or where their car is mainly garaged to obtain an out-of-state auto insurance policy. A single violation of this law can result in 18 months of prison, a fine of up to $10,000.00, and other penalties. The same conduct may also violate the New Jersey’s Insurance Fraud Prevention Act.5
Improperly obtaining out-of-state coverage for a vehicle mainly garaged in New Jersey can also prevent you from obtaining compensation if you are injured in an accident. New Jersey law provides that any person who fails to obtain the medical expense coverage (also known as Personal Injury Protection or PIP coverage) that is a mandatory part of New Jersey auto insurance policies “shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of an accident while operating an uninsured automobile.”6 Therefore, if you fail to obtain a New Jersey auto insurance policy for a vehicle you mainly garage in New Jersey, you could be barred from recovering compensation, even if the accident that caused your injuries was entirely someone else’s fault.
As a general rule, if your vehicle is registered or mainly garaged in New Jersey, it should be covered by a New Jersey auto insurance policy. If you are unsure if this applies to you or to review your auto insurance coverages/declaration sheet, call our attorneys for a free consultation.
- N.J.S.A. 39:6B-1; Citizens United Reciprocal Exchange v. Perez, 223 N.J. 143, 152 (2015).
- Chalef v. Ryerson, 277 N.J. Super. 22, 27 (App. Div. 1994).
- State v. Arslanouk, 167 N.J. Super. 387, 391-392 (App. Div. 1979).
- P.L. 2015, c. 48 (N.J.S.A. 2C:21-4.6(b))
- N.J.S.A. 17:33A-4(f)
- N.J.S.A. 39:6A-4.5(a).