Why NJ Has the Most Expensive Auto Insurance, and How to Pay Less

February 23, 2017

Did you know that motorists in New Jersey pay an average of $400 more than the typical driver in the United States? In 2014, the national average for car insurance was $866. However, drivers in New Jersey paid an average of $1,263 per car. A report by the National Association of Insurance Commissioners found that for the past five consecutive years, drivers in New Jersey had the most expensive car insurance premiums in the United States.

Why is the Car Insurance Expensive in NJ?

The urban sprawl of the Garden State leaves its roads densely populated with traffic. As a result, there are more people per square mile, in a limited amount of space. This recipe leads to more traffic accidents on the finite number of roads. In addition, the relatively high cost of living, coupled with the luxurious cars of the typical New Jersey driver, creates a costly car crash. Additionally, the personal injury and protection clause of the New Jersey car insurance policy is among the most expensive in the country. The driver is eligible for $250,000 in personal injury claims, unless the policy holder opted for less – 61% of New Jersey motorists remain eligible for this pricey insurance benefit. However, the high rates of auto insurance are in keeping with the state’s notoriety for being one of the most expensive states to live in the United States. New Jersey also has the highest property taxes in the country. As well as the highest per-student education costs.

How to Pay Less for Car Insurance in NJ?

Due to changes in recent state policies, there are more insurance companies to choose from when you are deciding about car insurance. More companies typically mean that the prices of insurance will be lower with increasing competition. With 82 companies writing car insurance policies in the state of New Jersey, it is worth your time and money to research which company can offer you the best premium rate. The State of New Jersey Department of Banking and Insurance website offers an online tool for comparing quotes across all the insurance writing companies in the state: http://www.state.nj.us/dobi/division_consumers/insurance/autopremiumcomparison.htm

The website also offers an extensive illustration of your current rating as a driver – whether you are an example of a 1-A (young single male, with no accident history, who drives for pleasure), or 4-B (married couple over 65 years old, with an unlimited right to sue option). The quotes are also offered by zip code and territory to give a more realistic comparison.

  • For a 1-A driver in the 07008 area:
  • Progressive Garden State Insurance Company: $1,028
  • Nationwide Mutual Insurance Company: $2,799
  • AIG Property Casualty Company: $3,274

Using a quote comparison could save you thousands of dollars every year in car insurance. So, if you live in New Jersey it is worth the effort to spend some time comparing quotes to save some money in insurance premium payments.

Quick Money Savings Tip For Safe Drivers

There are dozens of auto insurers – Which one will give you the best rate?

Step 1) Choose your vehicle make below.
Step 2) On the next page, complete the 4 minute questionnaire, and you'll have the opportunity compare the best rates in your area.
Step 3) Keep more money and possibly save hundreds!

1 Choose a make for potential car insurance discounts:

2 Replies to “Why NJ Has the Most Expensive Auto Insurance, and How to Pay Less”

  1. Hurricanes and tropical storms necessitate increased comprehensive coverage and with the most recent hurricane these rates are expected to continue to climb.

  2. Which is why making Insurance MANDATORY was the worst idea and law ever made in NJ. For most people that have only had a tiny fender bender paying thousands and thousands of dollars extra a year to hurricane victims is like stealing their grocery money, their loan payment or their savings away and giving it to strangers…
    it is and has always been a SCAM. On top of that scam you have in NJ something called Insurance Surcharges, for every ticket you get and pay for you also have to pay a fee hundred dollars on top of the tickets cost! It is Thievery!
    I hope NJ gets washed away in the next flood.

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