Compare Rates for New Jersey Car Insurance

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New Jersey Car Insurance Guide

You can’t afford to be caught driving without insurance. Join us as we compare New Jersey car insurance policies and see just how much rates may differ from company to company in this state. We can help you find the best car insurance quotes at the right price.

Basic Policy Coverage Requirements in New Jersey

In New Jersey, if you drive a motor vehicle, you are required to carry the following amounts of coverage:

  • $15,000 of bodily injury liability per person
  • $30,000 of bodily injury liability per accident
  • $5,000 of property damage liability per accident
  • $15,000 of personal injury protection (PIP) per person or accident

Though it may appear cheaper to opt for the bare minimum of required coverage, it might be a better idea to get a little more than that. That’s because even one accident can easily cause more damage than the basic coverage you carry.

If your insurance doesn’t cover the entire claim, you’ll be responsible for paying the remainder out of your pocket. It’s your responsibility to compare multiple car insurance quotes to find the right coverage with the best rates.

Does Cheap Car Insurance Exist in New Jersey?

The National Association of Insurance Commissioners (NAIC) has published a new study regarding the cost of auto insurance by state in the U.S. The results of the study show that New Jersey drivers, on average, pay more for auto insurance than drivers in other states.

So, why is cheap car insurance in NJ so tough to find? The story here isn’t just that New Jersey drivers pay more for auto insurance, but why they pay more. New Jersey, it seems, doesn’t do auto insurance the same as other states and for that reason, it’s hard to compare prices between New Jersey and other states.

New Jersey Auto Insurance Is on the Rise

How expensive is “expensive”? New Jersey drivers pay an average of $1,265.69 per year for liability car insurance, making them the most expensive state in 2015. That’s 42.37% percent more than the national average of $889.01.

If you look at insurance rates for liability and comprehensive combined, New Jersey averages out at $1,382.79, 38.23% above the national average of $1000.38. This is right below Louisiana’s average of $1,405.36, ranking NJ as second highest premiums. Since 2011, New Jersey has steadily increased in cost by 7% which is still under the average increase of 11.8%.

Don’t let the date of the NAIC study fool you, insurance data lags by about two years, which is normal for the industry. The 2017 study is the most recent one available at this date. To analyze a bit more recent data, we ran an internal study below.

Internal Study: Average Premium from 2016 – 2018

By using our internal data, we were able to analyze thousands of NJ drivers that have bought through in 2016 – 2018. We separated drivers that were previously insured and drivers that had let their insurance policies lapse. Diving further, we also compared full coverage against liability only.

Interestingly, we do see a decrease in rates from 2017 to 2018. Perhaps it’s a good time to compare rates in New Jersey? We’ll keep an eye on this to see if trends hold.

Attention: If you let your insurance lapse, your rates will almost certainly rise. Review the differences in liability and full coverage below.

Previously Insured Drivers: Liability vs. Full Coverage

Year Liability Avg. Premium Full Coverage Avg. Premium
2016 $1355.53 $2342.28
2017 $1421.76 $2438.05
2018 $1229.71 $2063.67

Drivers with Lapsed Coverage: Liability vs. Full Coverage

Year Liability Avg. Premium Full Coverage Avg. Premium
2016 $2317.51 $3733.41
2017 $2383.25 $4152.78
2018 $2228.22 $3665.40

How did we pull these numbers? – For this study, we calculated the average quote for both previously insured & not previously insured New Jersey drivers that had only one car in the household and no existing claims, tickets, or accidents. We then compared their full coverage quotes against their liability only quotes.

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Why is New Jersey Auto Insurance so Expensive?

The NAIC came up with their $1,265.69 figure by factoring in what auto insurance companies charge in New Jersey, as well as what consumers are buying. The reason the number is so much higher is that consumers in the state, on average, are electing for higher coverage levels.

That means that you can get more affordable coverage in New Jersey, but the average consumer there feels it necessary to utilize higher coverage levels to protect themselves. This can be related to several factors, some of which are related to the fact that most of New Jersey is an urban area. Urban areas carry with them higher crime rates and higher numbers of auto accidents and subsequent insurance claims.

Another reason New Jersey auto insurance rates are higher than the national average is because the insurance agencies in that state allow for much higher Personal Injury Protection (PIP- a coverage that covers medical costs related to a vehicle accident) coverage limits, which in turn, drives up the cost of auto insurance. New Jersey allows for the second highest levels of PIP coverage in the U.S., second only to Michigan whose PIP limits can be as high as the buyer wants (provided they are willing to pay for the coverage).

According to the study, New Jersey drivers carry on average the maximum levels of PIP coverage allowed within the state: $250,000. The minimum state requirement for PIP coverage is $15,000.

New Jersey Car Insurance Laws

Living in New Jersey features its own unique challenges regarding car insurance. If you’ve just moved to the state, or you’re getting car insurance for the first time, you need to understand that insurance works here in a little different way from many other states in the United States. Find out more about its laws below.

New Jersey is a No-Fault State

Years ago, some states adopted a car insurance system that designated the state as either “fault” or “no fault.” The purpose is to determine whose insurance policy would be used first after an accident.

Traditionally, we presume that whoever is at fault for the collision would offer his or her insurance to cover any damages. That’s true for states that use the “fault” system, but it doesn’t work that way in a no-fault state.

States like New Jersey that have adopted the “no-fault” system require drivers involved in an accident to seek compensation for injuries and lost income from their own insurance policies regardless of who is deemed at-fault.

Limited Right to Sue as a Driver

Because New Jersey is a no-fault state, a driver can only pursue an injury claim directly against the driver at fault if the injury is serious, according to the state’s definitions of serious injury. The state classifies serious injuries as:

  • Dismemberment
  • Disfigurement or significant scarring
  • Displaced fractures
  • The loss of a fetus
  • Permanent injury

If the accident qualifies for a direct injury claim, then the injured party can recover damages for pain and suffering as well as other non-economic losses that are otherwise prohibited in a personal injury claim.

Although it’s a no-fault state, New Jersey gives consumers a choice when it comes to what type of policy they wish to purchase. For example, you can select the option of a limited right to sue, or unlimited right to sue.

When you choose a limited right to sue, your premiums will be considerably cheaper, but in exchange, you are forfeiting your right to sue another party for pain and suffering.

What’s the Difference Between Liability, Comprehensive, and Collision Coverage?

Car insurance companies aren’t trying to cause confusion. Rather, they’re giving you the ability to meet your state’s minimum coverage requirements. They can also provide options to get full coverage if you want it.

It’s not hard to become confused when insurance companies talk about liability, comprehensive and collision. But they’re fairly simple once you understand what these different types of coverage are for.

Optional coverage is designed to protect your own property, and it includes comprehensive, collision and underinsured/uninsured motorist coverage. Mandatory coverage exists to protect other people, also known as liability insurance.

How are Car Insurance Rates Calculated?

Depending on your age, gender, marital status, and your credit history, the premium for your auto insurance coverage is going to vary compared to your neighbor’s … even if the two of you drive the same vehicle. Your driving record also counts when determining your policy cost.

The following factors matter too:

  • The age of your vehicle
  • How long you’ve held your driver’s license
  • How many vehicles you have on your policy
  • Whether your neighborhood is a high- or low-crime area
  • Where you park your car (garage, street, gated community, etc.)

The only way you’ll know if you’re getting the cheapest car insurance rate in New Jersey is to compare. Let us do the hard work for you. We can perform an insurance quote comparison in just minutes, so start today.

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