Final answer:
In New Jersey, the mandatory insurance for drivers is liability insurance, which covers damages and medical expenses caused to others in an accident. Optional coverages include theft, fire, and collision insurance. Insurance rates vary based on factors like age, driving history, and vehicle safety.
Step-by-step explanation:
In New Jersey, the type of car insurance that is mandatory for all drivers is liability insurance. Liability coverage is essential as it pays out when your car causes damage to others. This can include both property damage and medical expenses incurred due to an accident for which you are at fault. While other types of insurance such as coverage for theft, fire damages, and collision are important and can be added for more comprehensive protection, they are not required by law. Additionally, factors like age, driving history, and the vehicle's safety rating may affect your insurance rates. These rates can typically be paid in various intervals - monthly, quarterly, or biannually - and are an ongoing expense even after you've completed payments on your vehicle.