How Much Could New Jerseyans Save on Car Insurance by Shopping Around?

The state of New Jersey on top of moneyConsumers are well aware that the best way to get the biggest deals on any product is to shop around. Nearly every auto insurance commercial we see on T.V. suggests that we can simply compare quotes and find cheaper coverage, but how much can we really save? According to sample-rate comparisons in New Jersey, quite a bit.

In an analysis that included quotes from 59 insurers, the quote from the lowest-priced company tended to be about 80 percent lower than the quote from the highest-priced company, amounting to a difference of thousands of dollars.

The analysis, which used auto insurance quote data from the state's publicly available rate comparisons, found that quotes for coverage can also vary significantly depending on where in New Jersey the driver lives. We'll take a look at the difference in pricing in the most expensive and cheapest territories to see what kind of savings can be found.

The Specifics

The quoted rates that will be discussed are based on a multi-car policy for a married couple, both between the ages of 30 and 49, who have no tickets or accidents on record. The first vehicle used for this comparison was a 2010 Ford Escape XLT driven by the husband to work 10 or more miles a day and 20,000 miles annually. The second vehicle used was a 2008 Chrysler Town and Country LX driven by the wife less than 3 miles a day and less than 7,500 annually.

The policy they were rated for has the following coverages:

Coverage typeCoverage level
Bodily injury liability$100,000 per person
$300,000 per accident
Property damage liability$25,000 per accident
Personal injury protection$250,000 (with $250 deductible)
Uninsured motorist bodily injury$100,000 per person
$300,000 per accident
Uninsured motorist property damage$25,000 per accident
Comprehensive coverageIncluded on both cars
(with $750 deductible)
Collision coverageIncluded on the Ford Escape
(with a $750 deductible)
Right-to-sue optionLimited

The Results

We'll start by taking a look at how much this couple can potentially save by shopping around if they live in the territory that contains the city of Newark. Year after year, Newark ranks among the nation's most expensive cities for auto insurance.

According to 2012 Runzheimer International data cited by the Insurance Information Institute, Newark's average annual auto insurance premium was $2,937, which was the 5th most expensive in the country. Only Detroit, Philadelphia, New Orleans and Miami had higher average premiums.

Based on the rate comparison provided by the state of New Jersey, the highest quoted price in the Newark territory-and the state-for the married couple was $8,105. The lowest was $1,299. That amounts to a difference of $6,806, which means that motorists in Newark could be missing out on seroius savings by not shopping around.

At the other end of the spectrum was the Hackettstown territory, which had the lowest average rates for coverage for the couple.

When the married couple lives in Hackettstown instead of Newark, the lowest rate quote drops down to $898. The highest quote in Hackettstown was $4,256. That means even in the cheapest territory in the state for auto insurance, the difference between the highest- and lowest-priced companies is $3,358. So people with the lowest prices can still save quite a bit of money by shopping around.

When you look at the average quotes for all territories, the difference between the highest and lowest quote statewide was $4,662.