Final answer:
The mandatory insurance for all drivers in New Jersey is auto liability insurance which covers bodily injury, property damage, personal injury protection, and uninsured motorist coverage.
Step-by-step explanation:
In the state of New Jersey (NJ), the type of insurance that is mandatory for all drivers is auto liability insurance. This insurance coverage is essential as it provides financial protection for a driver who might cause harm to another person or their property while operating a vehicle. New Jersey law requires that all drivers carry minimum levels of liability insurance, which include:
- Bodily Injury Liability
- Property Damage Liability
- Personal Injury Protection (PIP)
- Uninsured Motorist Coverage
Auto liability insurance assists in paying for another person's medical expenses, lost wages, and property damage if you are at fault in an accident. Without this mandatory coverage, a driver can face legal penalties, including fines, license suspension, and even imprisonment. Drivers are also encouraged to consider additional coverage options to further protect themselves financially.