New Jersey Car Insurance Rates
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No matter where you live, driving can be risky. Accidents can and do occur, which is why drivers are legally obligated to have insurance in most states. Should you cause an accident, you could be liable for the other drivers’ property damage or bodily injuries.
New Jersey is no exception. Eligible drivers must have insurance before they get on the road.
But what are New Jersey car insurance rates? How much will insurance coverage cost? Below, we’ll cover everything you need to know about New Jersey auto insurance rates.
Annual Car Insurance in New Jersey Rates
According to Business Insider, the average cost of personal auto insurance in New Jersey is $1,553, which is considerably higher than the national average of $1,348. But the annual cost of auto insurance in New Jersey can range significantly, going as low as $1,104 or as high as $3,013.
If you’re searching for car insurance, it’s important to note that there are all kinds of factors added into the pricing equation. Your premiums are just one of the many moving parts.
But before we dive into the determining factors, let’s break down the two primary types of vehicle insurance available to New Jersey drivers.
Types of Car Insurance New Jersey
To legally operate a vehicle in the Garden State, you’re required by state laws to (at the very least) maintain a basic policy on your motor vehicle.
In 1998, New Jersey enacted the Automobile Insurance Cost Reduction Act to ensure that all drivers had an affordable auto insurance option. Costs did go down, however, it significantly stripped many of the common coverages and benefits associated with auto insurance. This minimum policy provides the following:
$5,000 property damage – Pays for damages your vehicle causes to other vehicles or structures.
$15,000 personal injury protection – This is $15,000 per person, per accident, up to $250,000 for severe injuries.
A basic policy can come with an optional bodily injury liability coverage that includes $10,000 for all people per accident. This type of car insurance coverage is intended for younger consumers who tend to have higher premiums and few monetary assets.
Many consider it to be a type of introductory insurance. As the state’s website notes:
“If you do not have any liability coverage, you are responsible for paying for the pain, suffering and other personal hardships and some economic damages, such as lost wages, that you cause. The insurer will not provide or pay for a lawyer to represent you if you are sued. Your assets will be at risk, including the risk of having money deducted from your wages if a judgment is entered against you. And, if you lack insurance coverage and someone hits you, you cannot sue.”
By at least having the minimum coverage, you can protect yourself and others when driving.
The Standard Policy
The standard auto insurance policy can contain several different types of coverage, including:
Bodily injury liability – Provides coverage for claims and lawsuits by people who were injured in an car accident you were the cause of. A standard policy starts as low as $15,000 per person, $30,000 per accident, or as high as $250,000 per person, $500,000 per accident.
Property damage liability – Provides coverage for claims and lawsuits by people who had their property damaged by an auto accident you were the cause of. A standard policy starts as low as $5,000 per person or as high as $100,000.
Personal injury protection – Provides coverage for injuries resulting from an auto accident involving anyone in the policy. A standard policy starts as low as $15,000 per person or accident, or as high as $250,000 and up.
Uninsured/underinsured motorist coverage – Pays for bodily injury or property damage if you are involved in an accident with a driver who doesn’t have insurance or the minimum level of insurance.
Collision – Usually available as an optional coverage, this provides coverage for damage to your vehicle resulting from a collision with another vehicle or object.
Comprehensive – Another optional type of coverage, it provides coverage for damage to your vehicle that isn’t the result of a collision. So, it can help cover things like theft, vandalism, fire, broken windows, etc.
Right to Sue
It’s important to remember that New Jersey is a no-fault state. So, your insurance can help pay for medical bills and lost income no matter who is the cause of the accident. That said, you have an unlimited right to sue for pain and suffering for any injury incurred.
However, with a basic auto insurance policy, you only have a limited right to sue, meaning you can only sue for pain and suffering for the following permanent injuries:
Loss of body part
Loss of a fetus
By choosing the basic option, you acknowledge that the only time you can or will sue is for permanent injuries.
What Factors Impact New Jersey Auto Insurance Rates?
There are a variety of factors that can impact that average cost of insurance in New Jersey. What you have to pay could be different from your neighbor depending on several elements, including:
The younger and more experienced you are at driving, the likelier you are to be in a crash. According to the CDC, “The risk of motor vehicle crashes is higher among teens aged 16-19 than among any other age group. In fact, per mile driven, teen drivers in this age group are nearly three times more likely than drivers aged 20 and older to be in a fatal crash.”
Within this age group are three categories that are even of higher risk:
Men – Motor vehicle death rate for male drivers in this age group was twice as high as female drivers.
Driving with teen passengers – The presence of teenage passengers is a distraction that increases the likelihood of an accident.
Newly licensed teens – Crash risks are at their highest during the first few months of licensure.
As a result, younger drivers will have higher insurance rates until they gain experience and demonstrate that they are indeed safe drivers. With each additional decade of life, insurance rates tend to decrease.
The less risky of a driver you are, the less it will cost to insure you.
If you have a driving record with motor vehicle violations like speeding tickets, at-fault accidents, or DUIs, your insurance rates will be higher, especially if you’re classified as a high risk driver.
On the other hand, if you have a “clean record,” meaning a history of no tickets or accidents, your rates should decrease in comparison. So, if you want to pay less for insurance, drive safely.
Where you drive and operate your vehicle will impact your rates. The total number of claims filed by policyholders within your territory informs insurers about the risks involved with driving in that specific area.
For instance, drivers in Newark, a city with a population of 282,011 are far more likely to get in an accident than drivers in Walpack, a city with a population of 11. As a result, on average, the drivers in Newark will have higher rates than those in Walpack.
According to the New Jersey Department of Banking and Insurance, “Insurance scoring is one of many factors used to evaluate risks and assign rates. It is based upon years of experience nationwide that demonstrate that there is a direct statistical relationship between how you manage your finances and your auto insurance risk.”
On average, the higher your credit score, the lower your auto insurance rates will be. If you improve your credit score, you can likely reduce your rates. You can do this in a number of ways, such as:
Pay bills on time
Keep balances low on unsecured revolving debt
Only apply for new cards if you need them
Request a free copy of your credit score each year to ensure accuracy
Statistically speaking males—especially younger males—are far more likely than females to not only get an accident, but to be involved in a serious accident. This is because they’re more prone to speeding, driving under the influence, or driving recklessly.
Per the New York Times: “Compared with women, male drivers of cars and vans had twice the rate of fatal accidents per mile driven. Male truck drivers had about four times the rate of women truckers, and men driving motorcycles almost 12 times the rate of women motorcyclists.”
According to Car and Driver, young men (under the age of 25) will pay approximately 14% more for their premium than their female counterparts. However, once they turn 25, their car insurance rates tend to equal out.
Like credit score, being married is often viewed by insurance companies as a sign of social responsibility. Per Car and Driver, married couples in New Jersey, even younger ones, tend to save approximately 21% on insurance rates, with an average of $104 in savings per year.
Getting Car Insurance
In New Jersey, you’re required to either have a basic auto insurance policy or a more standard policy to drive. You’ll also need this when applying for your New Jersey car registration.
Are you looking for the cheapest car insurance in New Jersey?
Online Auto Insurance can help with that. To ensure that you’re getting the best price, we let you compare auto insurance quotes online for no cost. This helps you find the right provider at the perfect price point.
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Business Insider. The Average Cost of Car Insurance in the U.S. https://www.businessinsider.com/personal-finance/average-cost-of-car-insurance
New Jersey State Legislature. The Automobile Insurance Cost Reduction Act. https://www.njleg.state.nj.us/9899/Bills/s0500/3_i1.htm
New Jersey Department of Banking and Insurance. New Jersey’s Basic Auto Insurance Policy. https://www.state.nj.us/dobi/division_consumers/insurance/basicpolicy.shtml
New Jersey Department of Banking and Insurance. Standard Auto Insurance Policy. https://www.state.nj.us/dobi/division_consumers/insurance/standardpolicy.html
CDC. Teen Drivers: Get the Facts. https://www.cdc.gov/motorvehiclesafety/teen_drivers/teendrivers_factsheet.html
New Jersey Demographics. New Jersey Cities by Population. https://www.newjersey-demographics.com/cities_by_population
New Jersey Government. Insurance Scoring. https://www.nj.gov/dobi/division_consumers/pdf/insurescore.pdf
New York Times. Behind the Wheel, Women Are Safer Drivers Than Men. https://www.nytimes.com/2020/04/27/well/live/car-accidents-deaths-men-women.html
Car and Driver. Which Gender Pays More for Car Insurance? https://www.caranddriver.com/research/a31268333/which-gender-pays-more-for-car-insurance/
Car and Driver. How Much is Car Insurance in New Jersey?https://www.caranddriver.com/research/a32729183/how-much-is-car-insurance-in-nj/