New Jersey Car Insurance: How to Qualify for the Cheapest Rates

There are two types of car insurance policies in New Jersey: basic and standard.

Basic insurance will be cheaper but won't provide as much coverage, whereas standard insurance will be more expensive but will provide plenty of coverage.

The average New Jersey car insurance rate (with “full coverage”) is $1,346 per year.

In this guide we’ll be helping you find the best blend of coverage and premium for your best protection.

What are Average Car Insurance Rates in New Jersey?

Statewide average premiums in New Jersey for three popular car insurance coverage levels (all premium information we’ll be providing comes from our sister site, CarInsurance.com) are as follows:

• “Full coverage” –100/300/100, with comprehensive and collision coverage, including a deductible of $500: $1,346 per year
• Liability only, with 50/100/50: $779 per year
• Liability only, using the state minimum coverage levels: $677 per year

Based on your specific circumstances and the variables that make up your driving profile, the average premium probably won’t apply to you, other than as a starting point.

You may pay more or less depending on where you live, your age, and the company providing your coverage.

Coverage levels

Coverage limits are commonly specified in the industry with three digits (e.g., 100/300/100).

• The first number represents bodily injury or death to one person in a single at-fault accident.
• The second number represents bodily injury or death to two or more people in a single at-fault car accident.
• The third number refers to property damage caused to other vehicles in an at-fault accident.

Full coverage also includes collision and comprehensive coverage, which pays for repairs to your vehicle no matter who is at fault.)

Factors that Will Affect Your New Jersey Car Insurance Premium

Below are seven factors that will determine the premium you’ll pay for New Jersey car insurance.

Gender

In most states, it’s more common for a man to pay more than a woman on a car insurance policy.

That is not the case in New Jersey.

A 30-year-old man will pay $107 per month for full coverage, while a 30-year-old woman will pay $116 per month for the same policy.

Your age

Much like any other state, age in New Jersey is a major factor when it comes to determining your rate.

Drivers under the age of 25 will pay much more for a policy.

An 18-year-old male driver living in Newark will pay $302 a month, or $3,624 per year, for state minimum coverage.

A 30-year-old male, also living in Newark and with the same coverage, will pay $107 a month, or $1,284 per year.

In most of the US, insurance rates will go up once you reach the age of 65.

However, in New Jersey, rates start to fall once you hit 65. A 75-year-old man will pay $91 per month, or $1,092 per year, while a 30-year-old man with the same policy will pay $107 per month, or $1,284 per year.

Driving records

Your driving history will play the biggest role when it comes to your rate.

• Speeding 10-15 miles over the limit will result in a 17% premium increase.
• Speeding 30 miles over the limit will produce a 32% premium increase.

Meanwhile, the average increase in New Jersey is 132% for a DUI/DWI first offense (subsequent offenses will be much higher and carry serious penalties).

There is an average 20% increase in premiums for an at-fault accident.

That said:

The exact amount of the increase will depend on the dollar amount of any property damage claim, or whether or not the accident resulted in bodily injury to you or to other drivers.

Credit history

Insurance companies look to your credit score when it comes to your premium.

A driver in New Jersey with bad credit will pay 106% more on their premium than a driver with good credit.

Unfortunately, New Jersey is one of the worst states for drivers with bad credit.

But you may be able to lower your premium by finding a company that takes a more favorable view of bad credit.

Coverage amount

As stated before, a policy with liability limits of 100/300/100 is $1,346 per year, while liability coverage limits of 50/100/50 is $779.

State coverage for minimum liability is $677 per year.

The amount of coverage you choose for your premium should be based on your net worth.

For example, if your net worth is less than $50,000, you might be able to take the state minimum coverage. If your net worth is between $50,000 and $100,000, choose at least 50/100/50. If it's more than $200,000, choose at least 100/300/100.

That said, state minimum liability may not be enough. Too little coverage can lead to a major lawsuit or claim. This could force you to have to pay for out-of-pocket expenses if your policy limits are exceeded.

Vehicle(s) on the policy

An older vehicle will usually cost less to insure than a brand-new one. Brand-new cars and certain vehicle types, like SUVs, pickup trucks, sports cars, and luxury cars, will cost more to insure than a 10-year-old sedan.

One major advantage with an older vehicle is that you may not need certain coverage options, like collision and comprehensive coverage.

That will generally be an option if the vehicle is worth less than $3,000. If so, it can save you hundreds of dollars each year.

The insurer

The company you choose your premium with will be a major factor.

The difference in companies for the same policy can be thousands of dollars.

Below are the average statewide premiums for full coverage (100/300/100) by five major carriers operating in New Jersey:

• 21st Century: $762 per year
• GEICO: $1,104 per year
• Progressive: $1,255 per year
• Allstate: $1,760 per year
• State Farm: $1,847 per year

Notice that State Farm, the most expensive provider, charges premiums that are more than double those of 21st Century, the least expensive provider.

What is the Average New Jersey Car Insurance Rate Based on New Jersey City?

Within the same state, there can be major variations in premium levels from one city or town to another.

With the statewide average premium at $1,346 in New Jersey for 100/300/100 coverage, average premiums on a local level are as follows:

• Clifton: $1,603
• Elizabeth: $1,793
• Jersey City: $1,600
• Newark: $1,513
• Paterson: $1,782

Car insurance will most likely be higher in more populated areas such as Jersey City.

More populated areas, like the cities listed above, mean more traffic and potential for accidents. Rural and more remote areas will have lower rates.

Auto Insurance Laws in New Jersey

New Jersey is a no-fault state. If you get into a car accident, you’ll be compensated by your own insurance company.

New Jersey car insurance laws require that drivers carry minimum liability coverage limits of 15/30/5 on their vehicle.

The minimum car insurance requirements in New Jersey are listed below:

• Minimum bodily injury liability, one person: $15,000/$30,000
• Minimum bodily injury liability, two or more people: $30,000
• Minimum property damage liability: $5,000
• Uninsured/underinsured motorist bodily injury: $15,000/$30,000
• Uninsured motorist property damage (with a $500 deductible): $5,000
• Personal Injury Protection: $15,000

If you are injured in an accident, no matter who’s at fault, you’ll claim against your own PIP coverage first. If your PIP limits are maxed, you’ll claim against the at-fault person's bodily injury liability.

However, be aware that you can increase your PIP limit to as high as $250,000.

Unlike some states, uninsured/under-insured motorist is a require coverage in New Jersey. It will cover you if you’re involved in an accident that’s the fault of another driver who either has inadequate coverage or none at all.

As a no-fault state, New Jersey requires you to carry personal injury protection (PIP).

PIP of at least $15,000 is designed to provide immediate treatment after a car accident. Each driver files against his or her own policy, rather than the other driver's. This includes medical expenses but not lost wages, death or funeral expenses.

CARCO inspection

The state of New Jersey requires that vehicles are inspected before certain insurance coverages such as comprehensive and collision can be purchased.

This is an independent inspection that verifies the existence of your vehicle along with its options, accessories, mileage, and physical condition.

Photos are taken of your vehicle and a report is then produced and sent to your insurance company.

The CARCO inspection is not required if your vehicle is brand-new and has less than 1,000 miles on it.

Basic Information on Optional Coverages in New Jersey

As is the case in virtually every other state, there’s a wide range of optional coverages available to add to your policy in New Jersey.

The most popular include:

Collision & comprehensive

While the personal property damage portion of a car insurance policy covers the cost of repairs to the other driver’s vehicle when you are determined to be at fault, it will not cover the cost of repairs to your vehicle.

You’ll be covered by adding collision and comprehensive coverage to your policy.

Collision will cover your vehicle for damage while it’s in motion, while comprehensive will cover it while it’s parked. That can include damage from storms, falling trees, vandalism or theft.

If you have a loan or a lease on your vehicle, the combination will be required by your lender.

Guaranteed Auto Protection (GAP)

If your car is ever stolen or totaled in an accident this add-on can help you cover the loss by paying off the lease or loan.

It’s not required, except by lenders on cars with loans greater than 80% of the vehicle’s value.

But it is recommended if you believe you owe more on your car than it’s worth.

Medical payments (MedPay)

Covers medical and funeral expenses of covered drivers and passengers after an accident up to the coverage limit, no matter who's at fault.

This provides you and your passengers with coverage of medical expenses if your health insurance limits are exceeded.

Tips to Get the Best Rates on New Jersey Car Insurance Policies

Below are the most popular strategies to get the best rates on car insurance in New Jersey:

Drive safely

Your driving history will have a major impact on your premium. Avoid any violations or at-fault accidents. A clean driving history for 3 years or more will provide you with the best rates available.

Look for the lowest rates

The difference in price for the same policy can be thousands of dollars between carriers. Shop and compare prices to find the right match.

Complete a safe driver course

If your driving record is poor, your insurance company may have the option to complete an approved safe driver course. It could lower your premium by 10% or more.

Increase your deductible

Raising your deductible, $500 to $1,000 can significantly reduce your annual premium.

Discounts

Insurance companies offer multiple options for you to earn discounts on your policy. Find out which ones your carrier offers, and take advantage of every one that applies to you.

Keep your credit clean

Your credit score will be a factor in most states, but New Jersey is one where it will have a particularly big impact.

Poor credit can easily double your premium.

Keep your credit clean for at least the last two or three years, and you’ll likely qualify for a lower premium.

Bottom Line

New Jersey’s car insurance requirements tend to be more complex than they are in other states.

But it’s still possible to get low premiums with adequate coverage by knowing what those requirements are and how to meet them at the lowest possible cost.