Which states are increasing car insurance limits for 2026, and why?
New Jersey is the only state with a planned increase to car insurance minimums in 2026. Rising costs have led many states to increase the minimum amount of liability insurance required by law to cover bodily injuries and property damage caused in an accident.
If you already carry higher limits than the minimum, you shouldn't see any changes.
What's changing in New Jersey's car insurance laws for 2026?
New Jersey will complete the final stage of a phased increase to car insurance minimums that was begun with an increase in 2023. The changes will affect the amount of bodily injury liability coverageThis auto insurance coverage helps pay for medical expenses and lost wages if you injure someone in a car accident. It also covers legal fees if you're sued. that drivers are required to carry by law.
The previous required coverage in New Jersey was:
- $25,000 per person for bodily injury
- $50,000 per incident for bodily injury
- $25,000 per incident for property damage
As of January 1, 2026, New Jersey drivers must carry:
- $30,000 per person for bodily injury
- $70,000 per incident for bodily injury
- $25,000 per incident for property damage.
Remember that if you have a loan on your vehicle, you will also have to comply with the lender's insurance requirements, which will include carrying comprehensive and collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible..
Will car insurance rates increase with the changes?
Drivers in affected states with minimum coverage will likely see an increase in their car insurance rates. Since the increase in New Jersey is not drastic due to the two-part rollout of the changes, most drivers should see minimum rate increases.
However, your rates are unlikely to be affected if you already carry more than the minimum coverage.
People ask
Is car insurance going up in California?
No. California does not have any car insurance minimum increases scheduled for 2026. The state increased its minimums in 2025.
Why are states changing their auto insurance limits?
Insurance costs and claims payouts have increased dramatically in the last few years. Rates have increased significantly to keep up with claims-related expenses. However, many states have not increased the minimum coverage amounts in decades.
Some states are trying to keep up with rising costs by requiring drivers to carry increased minimum liability coverage.
Reasons for increasing liability coverage limits include:
- Increased repair costs. As vehicle technology advances, the cost of repairs or replacement increases. Instead of just replacing a bumper, advanced systems such as lane-keeping assist and adaptive cruise control may also have to be replaced.
- Increased medical costs. Emergency room visits, ambulance rides, and prescription costs have skyrocketed. Loss of wages, doctor visits, and diagnostic testing also increase medical costs.
- Decreased debt. If you don’t carry enough car insurance to cover injuries and damages that you cause, you may have to pay out of pocket. Increased liability limits mean the insurance company pays more, so you pay less.
How do I increase my car insurance limits to the new minimum?
Your insurance company will automatically increase coverage limits in New Jersey when your policy renews after Jan. 1, 2026. The new minimums will be included if you obtain a new car insurance policy.
If you want to increase your liability limits before renewal, contact your car insurance company to make changes to your current policy.
FAQ: States with minimum car insurance requirement changes
Will the car insurance limit changes affect a non-owners policy?
Non-owner car insurance provides at least the minimum required liability coverage when you drive a vehicle you don’t own. The coverage limit changes will affect a non-owner policy to accommodate the increased liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. required.
Will the changes to car insurance limits benefit me?
Increased liability limits are beneficial because they provide more protection for you and your vehicle in an accident. With the increased costs of repairs and medical expenses, higher limits mean fewer out-of-pocket expenses since insurance covers more costs.
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