New Jersey Car Insurance

In the Garden State, auto insurance rates for state-mandated minimum coverage are relatively expensive, exceeding the national average. However, the cost of purchasing a full coverage policy is comparatively more affordable, falling below the US average. Remarkably, the state maintains a low uninsured driver ratio of 3.1%, a quarter of the national average, despite having higher costs for minimum coverage.

New Jersey Requirements

Images from New Jersey

In New Jersey, there are two types of auto insurance policies: standard and basic. The standard policy (widely preferred) offers multiple coverage options and the choice to add extra protection, while the basic policy is cheaper but provides limited benefits. Here are the minimum standard car insurance requirements;

  • $25,000 for bodily injury per person.
  • $50,000 for bodily injury per accident.
  • $25,000 for property damage.

New Jersey also requires Personal Injury Protection (PIP), Uninsured/Underinsured Motorist Bodily Injury (UM/UIM BI), and Uninsured/Underinsured Motorist Property Damage (U/UIM PD) for a standard policy with the following minimum limits:

  • PIP: $15,000 minimum coverage
  • U/UIM BI: $25,000 per person, $50,000 per accident
  • U/UIM PD: $25,000 per accident with a $500 deductible

PIP covers your medical costs, lost wages and death benefits, even if you’re at fault. U/UIM BI pays for medical expenses for you and your passengers if a driver with little or no insurance causes the injury. UM/UIM PD covers damage caused to your vehicle by an uninsured driver.

In New Jersey, drivers can choose between Full Tort and Limited Tort options for their insurance coverage. Full Tort allows you to sue the negligent party for pain and suffering irrespective of injury severity. Limited Tort, a more affordable choice, limits your ability to sue for pain and suffering unless the injury is serious.

New Jersey allows up to $250,000 Personal Injury Protection coverage, which is the second highest after Michigan.

You can find the official website of the NJ Insurance Department for the latest changes in the laws and enforcement.

Automobile Insurance Costs in NJ

With almost 9 million residents, the Garden State holds the title of the most densely populated state in the US. This leads to road congestion and an uptick in vehicular crimes, which could subsequently contribute to elevated average vehicle insurance premiums.

The average cost for a state required minimum coverage policy is $782 in NJ and it is about 26% higher than the US average. But the average full coverage car insurance is relatively cheaper at $1,754, which is $260 lower than the country average.

On average, a full coverage policy in NJ might be priced at over twice the cost of a liability-only policy. Despite this, it remains relatively affordable due to the fact that the difference in premiums between full coverage and liability-only policies is three to four times higher in other states. With such a narrow cost gap, it’s recommended to consider upgrading to a full coverage policy if you haven’t already. Full coverage vehicle insurance includes liability and other state-mandated coverages, along with Collision and Comprehensive coverage, providing protection for your own vehicle.

Affordable Auto Insurance Companies in New Jersey

Policyholders often have limited control over external factors that affect their premiums, such as the higher rates associated with specific zip codes. Nevertheless, there are strategies to alleviate premium expenses, and one effective approach is to identify the most competitive insurance providers. In NJ, it’s recommended to begin by exploring the list of the most competitive vehicle insurers below. By obtaining multiple quotes and comparing rates, you can often secure lower prices.

  1. Geico
  2. NJM Insurance
  3. Plymouth Rock
  4. State Farm
  5. Progressive

The prices across the cities are widely spread on both sides of the state average. Generally, the larger and more densely populated a city, such as Newark, the higher motorists need to spend on premiums. As expected, drivers in Newark pay on average 48% higher automobile insurance rates in comparison to the state average. So, where you live influences rates much more than most people realize and this is heightened in states like NJ.

Notable New Jersey Auto Insurance and Driving Facts

  1. Driving without car insurance in New Jersey results in penalties based on prior offenses. First-time offenders face fines of $300-$1,000, a $250 yearly surcharge for three years, potential one-year license suspension, and community service. Repeated offenses incur fines of $500-$5,000, $250 yearly surcharge for three years, up to two years’ license suspension, possible 14-day jail term, and potential vehicle impoundment if insurance proof isn’t provided within 24 hours.
  2. The Garden State is one of the top 10 safest states in the country for teenage drivers.
  3. Having poor credit can lead to higher insurance rates for your vehicle in New Jersey. As reported by Forbes, individuals with poor credit can expect to pay premiums that are 65% higher compared to those with a good credit history. This correlation between credit history and insurance premiums underscores the impact that credit can have on the cost of insuring a vehicle in the state.
  4. New Jersey auto insurers are obligated to provide discounts to drivers who have completed an approved defensive driving course. Successfully completing the course earns drivers a minimum 5% discount on Liability, PIP and Collision coverage. It is valid for three years or until the driver amasses four motor vehicle points or has their license revoked.
  5. Also, vehicle insurance companies are required to provide discounts for vehicles equipped with certain safety features such as anti-lock brakes, airbags, passive restraint systems, and anti-theft vehicle recovery systems. The discounts offered can vary from a minimum of 5% up to 20%, depending on the specific safety device installed in the auto.

Doing some research and exploring different options can significantly contribute to lowering your premiums. While some drivers might believe that this process demands a substantial time investment, the efficiency of the internet enables swift access to various resources. This includes obtaining multiple car insurance quotes and easily comparing them.