Final answer:
In New Jersey, every driver is legally required to have liability insurance, which covers damages and injuries to others if the insured is at fault in an accident. This insurance is crucial for financial protection against significant expenses post-accident. Premiums for liability coverage can vary based on various factors.
Step-by-step explanation:
The type of insurance that every driver must have in the state of New Jersey is liability insurance. Liability insurance is essential as it covers the costs associated with damage and injury to others if the insured individual is responsible for an automobile accident. This is a mandated coverage, distinct from collision insurance, comprehensive insurance, and personal injury protection, which are other forms of car insurance that drivers may also choose to carry.
Having liability insurance is not just a legal requirement but also a financial safeguard. Without it, drivers could be responsible for large out-of-pocket expenses after an accident. It's important to note that insurance premiums can vary based on factors like the vehicle's safety rating, the driver's history, age, and the payment plan chosen for the insurance rates (monthly, quarterly, or semi-annually).