Who has cheap car insurance in New Jersey?

Cheap car insurance in New Jersey is much easier to find now since the state governor overhauled state insurance laws in 2003. GEICO, State Farm, Mercury, and Esurance all offer cheap auto insurance in New Jersey. Enter your ZIP code below to compare New Jersey car insurance quotes from multiple companies.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 29, 2020

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Finding cheap insurance has become somewhat easier in every state with the age of the Internet. In New Jersey, the insurance climate has improved considerably, requirements have changed, and cheaper insurance is much more available than it used to be.

Factors relevant to each individual driver can increase or decrease insurance rates, depending upon what type of risk profile they represent to insurance companies. Knowing these factors gives consumers the advantage, as they have a good degree of control over many of these factors.

Additionally, insurance companies in New Jersey compete with each other, which bodes well for consumers as there exists many discount opportunities to investigate as well.

Car Insurance Rates in New Jersey

New Jersey has historically charged residents the highest premiums for insurance in the nation. Additionally, years of legislation layered on more legislation had driven 40 insurers out of the state within a 10-year period.

By 2002, the major insurers had started to reduce their New Jersey customer base and prepare to leave the state, and citizens started to have a difficult time finding auto insurance due to a very real shortage of available insurers.

In 2003, the insurance legislation was overhauled under Governor McGreevey. The changes created a more hospitable climate for insurance companies, and convinced State Farm and AIG to continue doing business in the state. Mercury Insurance came to New Jersey, as well as other small insurers, subsequently adding over 500 new agents to insure New Jersey’s drivers.

New Jersey Car Insurance Requirements

New Jersey has current minimum legal requirements for liability insurance of 15/30/5, which translates as $15,000 bodily injury coverage per person, $30,000 bodily injury coverage per accident, and $5,000 personal property coverage per accident. New Jersey requires basic liability insurance like other states, but it also mandates personal injury protection (PIP), as well as uninsured motorist coverage.

PIP covers the insured’s medical expenses and those of his passengers in an accident. It pays for hospital expenses, child care for the injured, loss of services and funeral expenses. Drivers may not opt out of this coverage, however if they carry adequate health insurance they may only need the minimum PIP coverage.

Uninsured motorist provides coverage for accidents caused by a driver who has no insurance. It covers a driver, her passengers and insured household members personal or bodily injuries, damages or death caused by a hit-and-run or uninsured driver who is at-fault. The policy covers medical expenses for the insured up to policy limits.

Primary Factors affecting Auto Insurance Rates

The state a driver lives in plays a big part in determining his auto insurance rates. Every state has different insurance structures, as they each regulate their own insurance and devise their own legally required limits. Iowa has the lowest average yearly car insurance rates in the nation, at $690, according to a study from CarInsurance.com. Comparatively, New Jersey’s average annual insurance rate is $2,347. This stacks up against the national average of $1,433.

New Jersey’s average costs are higher partly due to the mandatory personal injury and uninsured motorist protection the state requires, since many other states only require basic liability coverage.

Age also factors into insurance rates, as well as gender. According to statistics published by the Insurance Institute for Highway Safety, males had a higher auto accident death rate in all age groups above 15 years than females. Additionally, approximately 70 percent of deaths in auto accidents in 2009 were males. These unfortunate statistics cause males to fall into a higher risk category and subsequently cause them to have higher insurance rates.

Secondary Factors

Driving history is another factor that influences insurance rates, with an increase in rates for every point that hits a driver’s record. Even one point from a minor speeding ticket can raise rates, and certain premium insurers will not renew policies for drivers with more than one point. Fortunately, some insurance companies specialize in higher-risk drivers which provides a good option to explore for lower rates.

Choice of Vehicle

The car a person chooses to drive can affect her insurance rates quite a bit. On the plus side, a car equipped with airbags and anti-lock brakes may earn a discount from insurers. However, sports cars and luxury cars will increase a driver’s risk profile in the eyes of the insurer, and rates will go up. The least expensive car to insure is the Mazda Tribute SUV, according to a survey published by Insure.com. However, for drivers who have their hearts set on a Mercedes SL65 AMG 2-door luxury sport coupe, the annual insurance will run them approximately $3,544.

Finding the Cheapest Car Insurance

There are two ways to find the cheapest insurance in New Jersey, starting with shopping around. Each insurance company has its own statistical models for calculating policy premiums, and different insurers place different weights on a large number of factors. Many of the larger insurance companies such as State Farm and Geico provide free auto quotes on their websites, which can be had in as little as six minutes. There are also websites such as Esurance.com that will shop several companies at once and provide online quotes for drivers.

Taking advantage of every insurance-lowering tactic available serves as the second way to find the cheapest insurance. Add anti-theft devices, an auto-disabling device, and VIN etching to your car.

An easy one is raising the insurance policy deductible; some will go as high as $1,000. Attend a defensive driving school and send teen drivers to one as well. Urge teens to get a B-average or higher in school in order to receive a good student discount. Pay the policy upfront for the whole year; look for group insurance discounts from a credit union, school, or even certain credit cards.

Drive safely and attend traffic school in case of a ticket to keep any points off your driving record. Lastly, combine auto insurance with a homeowner’s policy, and watch your credit rating or choose an insurer who does not check credit ratings.

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