Average Cost of Car Insurance in New Jersey

Since auto insurance is so subjective, insurers use various characteristics about each driver to determine their rates. Let’s look at what factors insurers in the Garden State use to determine one’s premiums, what the average New Jersey auto insurance policy looks like, and how vastly premiums differ from driver to driver.

In terms of auto insurance, New Jersey is one of the more costly states in the country. The average full coverage policy in the Garden State costs about $1,900 annually, meaning the average minimum coverage policy generally costs about $950 annually since it contains about half the amount of coverage.

The state average is typically the ballpark in which most insurers offer premiums. However, when insurers determine a driver’s premiums, they assess a driver’s risk of filing a claim. When a driver is at a higher-than-average risk of filing a claim, an insurer may consider them a high-risk driver and increase their premiums to compensate for that risk. 

Insurers use several factors to determine a driver’s risk level, both related and unrelated to one’s driving habits. Insurers will always use one’s driving record and insurance history to calculate premiums. Sometimes, insurers will use a driver’s age, ZIP code, or gender, among other factors, to determine their rates. 

Drivers with a recent poor insurance history will almost always have above-average premiums. Driving without insurance in the Garden State is illegal, and drivers may face severe penalties for breaking this law, ranging from legal, financial, and insurance-related.

While SR-22 insurance isn’t available in the Garden State, high-risk drivers in the state with the mark of driving without coverage on their record will generally pay about double or triple the average rate in the state for several years. However, it’s essential to remember that insurance premiums ebb and flow over time and eventually decrease for drivers who commit to making good choices behind the wheel.

If the average annual New Jersey auto insurance rates hover around $1,900, then monthly rates will be about $160 for a full coverage policy. It’s crucial to note, though, that insurers often discount rates for those who opt to pay annually rather than several times throughout the year, whether that’s monthly or bi-annually. 

Rates may differ in the Garden State depending on what type of policy the driver carries. Drivers can have two types of policies in the state: a basic or standard policy. Basic policies have the lowest mandatory minimum coverage, and standard policies have an average amount of minimum coverage.

The minimum coverage required on a basic policy is about $10,000 in bodily injury liability per accident, $5,000 in property damage liability per accident, and $15,000 in personal injury protection or PIP. Drivers must have at least this amount of coverage on a basic policy to be considered legally insured. Drivers can’t have a standard policy but only carry this amount of coverage.

Auto insurance laws in the Garden State require drivers to have at least $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident, $25,000 in property damage liability per accident (25/50/25 liability coverage), the same 25/50/25 limit of uninsured and underinsured motorist coverage (UM/UIM), and $15,000 in PIP. Those who lease or finance their vehicles may be required to have collision and comprehensive coverages. 

While drivers are only legally required to carry the minimum amount of coverage necessary for the policy they possess, many drivers opt for a full coverage policy instead. While the cheapest policy in the state will always be a minimum coverage one, such a bare-bones policy may not offer enough protection for drivers to feel safe behind the wheel. However, binding a full coverage policy with one of the state’s top insurers is an excellent way to save on premiums while maintaining enough coverage to be protected in various scenarios.

Regarding average auto insurance, New Jersey drivers who are new to the road may expect to pay a bit more in premiums. When insurers assess a driver’s risk of filing a claim, their decision weighs heavily on one’s driving record and insurance history. Since new drivers don’t have an established record of driving habits or paying their premiums on time, they may pay above-average premiums for a few years while establishing themselves as trustworthy policyholders. 

Car insurance for an 18-year-old in New Jersey may be a bit more than the average rate in the state. While some 18-year-olds may have been driving for over two years, young drivers generally pay higher rates because, according to the CDC, they’re more likely to get into accidents and file claims than their older counterparts.

While finding a cheap policy for an 18-year-old can be tough, it isn’t impossible. In fact, many insurers offer discounts specifically for young drivers to help them establish their trustworthiness and to help them lower their premiums. Many insurers offer discounts geared toward young drivers, like a student discount for those who earn good grades in school. 

It’s tough to pinpoint an average New Jersey car insurance cost without narrowing down the average policy for drivers in the state. Generally, drivers carry full coverage policies to maintain coverage for various accident scenarios. While drivers are only required to maintain the minimum coverage required on their policy type, many opt for a full coverage policy because of the peace of mind it provides.

Since the Garden State is a no-fault state, drivers will always have a minimum amount of PIP on their policies. PIP is a type of coverage drivers carry to cover any medical expenses they may incur in an accident, regardless of who caused it. While the Garden State is a no-fault state, not a tort state, drivers must carry some tort coverage on their policies should they require additional coverage after maxing out their PIP after an accident.

Generally, drivers with full coverage policies in the Garden State will have standard policies. On their full coverage standard policies, drivers will carry higher limits of liability and UM/UIM coverages than what’s legally required, about $250,000 in PIP coverage, and additional coverages like collision coverage, comprehensive coverage, medical payments coverage (MedPay), or gap coverage, among other optional coverage types.

The average cost of car insurance in New Jersey is about $1,900 annually for a full coverage policy, which is about 15% more than the national average of about $1,670 annually. Generally, there are a few reasons why car insurance rates are higher in some states than in others, all of which concern the state’s population.

New Jersey is one of the country’s most expensive states for auto insurance. Typically, if a state has above-average premiums, the state’s population, population density, or population of uninsured drivers is above average. While New Jersey is by no means the most populated state and actually has the fewest uninsured drivers in the country, it is one of the most densely populated states in the nation. 

Since the Garden State is so densely populated, more drivers are on the roads, leading to an above-average number of accidents then leading to an above-average number of claims. To compensate for the number of claims the state sees, annual premiums in the state are above the national average rate. 

New Jersey insurance rates are some of the most expensive in the country. While some of the most expensive states for auto insurance, like Florida and New York, have average annual premiums above $2,000, New Jersey isn’t too far off, with the average full coverage premium falling at about $1,900 annually.

Whether you’re ready to bump your policy up to full coverage, trying to lower your premiums below the average rate in the state, or curious about what types of additional coverage insurers in the state offer, the best way to see the policies you qualify for is to get and compare quotes online. By getting and comparing quotes online, you can find the right policy for your needs while getting the most bang for your buck.

Luckily, we have a free quoting tool you can use right here at Clovered. In minutes you can access your unique quotes and analyze rates to your heart’s desire. If you’d rather chat with a professional, you can contact one of our licensed agents at 833-255-4117 or [email protected].