New Jersey insurance premiums are not necessarily the highest in the country but are usually in the top 5 or 10 nationwide.According to a study in 2005 Newark, NJ had the third highest annual insurance premiums at $3,482 but Detroit, Michigan came in first at over $5000.

There are different theories as to why New Jersey has such high insurance rates.Some economists say it is due to the 'no fault' system which allows courtroom litigation which give judgments for considerable sums.The insurance companies then pay out and if do so on a regular basis need to raise insurance rates to cover these costs.

So New Jersey insurance companies may claim that high legal expenses continue to keep insurance rates high even though New Jersey has made many auto insurance reforms in the last several years.

The reforms now require insurance companies to offer three coverage choices, called Insurance Scenarios, when buying a new policy, or upon request if you are already insured.The NJ Department of Banking and Insurance lists the 2 main choices as the Standard Policy and the Basic Policy.

The Basic policy provides limited benefits but cost less.There has also been some low cost insurance coverages allowed for those in need and meet certain requirements.

For more information on New Jersey insurance and a quote, go to our NJ state page.