"Immediate attention must be paid to even more urgent auto insurance market conditions," said the Insurance Council of New Jersey.

Under the fee waiver program, DOBI said uninsured motorists can save between $115 and $1,300, but they must buy coverage through the Personal Automobile Insurance Plan, NJ-PAIP.

A department announcement explained that "Last Chance" waives underwriting surcharges for being uninsured only; all surcharges for other violations and at-fault accidents and surcharges imposed by the Division of Motor Vehicles still apply.

Ms. Bakke said the aim is to "help uninsured drivers do the right thing. ?Last Chance' offers those with the greatest impediments to becoming legal an opportunity to come back to the market at a lower cost."

Persons eligible for the program are those who must buy auto insurance through NJ-PAIP for one of two reasons: They have a conviction for driving uninsured, or they were canceled for not paying their premiums and have been without coverage more than 30 days. Participants cannot cancel an existing policy to get into the program.

Ms. Bakke's department said those who have a conviction for driving uninsured must still pay court costs and complete any court-imposed suspension of their driver's licenses.

Those who take advantage of "Last Chance" must separately show DMV that they have obtained coverage to avoid cancellation of their vehicle registration, DOBI explained.

Surcharges that will be waived under the program include those for driving uninsured and cancellation for non-payment.

Motorists can buy either a Standard Policy or a Basic Policy through NJ-PAIP. Under the Basic Policy, drivers opting for "bare bones" liability coverage would save either $115, or $1,035 if they had received a conviction. (Collision and comprehensive coverage can be added to a Basic Policy at a higher cost, with additional surcharges waived.)

Ms. Bakke said New Jersey's Basic Policy could be an appropriate, low-cost option for drivers with few family obligations or assets to protect. The Basic Policy, created by the Legislature in 1998, offers minimal liability coverage and $15,000 in medical benefits at a cost hundreds of dollars below that of Standard Policy.

"The Basic Policy is not for everyone," she said. "But if your only other choice is driving without insurance, it's a better option than driving illegally."

The department said drivers who have allowed their old policies run out are encouraged to first seek coverage in the voluntary market, where rates are lower.

Both the Basic and Standard Policies are available in the voluntary market. Any driver who is denied a Basic Policy should immediately report this through the toll-free hotline, 1-800-446-SHOP, the department said.

Commissioner Bakke noted that drivers can lose their licenses for a year with the first conviction for driving without insurance, and may face jail time for additional offenses.

John K. Tiene, president of the Insurance Council of New Jersey, said, "We applaud the department's efforts to assist uninsured motorists in our state to get the coverage they need and to increase consumer awareness about the basic policy.

"More importantly, however," he continued, "New Jersey needs to act and fundamentally change the way it regulates the business of auto insurance to encourage competition.

"More than providing amnesty for uninsured drivers and educating consumers, however, New Jersey needs to enact meaningful auto insurance changes for the benefit of all New Jersey drivers," added Mr. Tiene. "There are also concerns that suspending actuarially sound surcharges will expand the PAIP deficit that all policyholders are responsible for."

Mr. Tiene's group said excessive regulations imposed on New Jersey's auto insurance industry have created an unhealthy market that limits consumer choice. More than 20 auto insurers have left New Jersey in the last 10 years.

State Farm's recent agreement for a phased exit, along with two others that are leaving, will put more than 800,000 policyholders into the state's already overstressed market, the council said.

"New Jersey's auto insurance system is currently under tremendous strain and actions must be taken to ensure long-term stability in the market," continued Mr. Tiene. "Consumers and insurers alike are frustrated. Problems will only escalate in the absence of action."

The Insurance Council of New Jersey member companies underwrite 96 percent of automobile insurance policies in New Jersey.