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New-Jersey

New Jersey Car Insurance

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NJ car insurance

New Jersey car owners have a choice between two types of NJ auto insurance policies: basic or standard. The basic option is the cheapest car insurance in NJ, but offers limited coverage. The standard policy costs more, but provides sufficient coverage.

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Use our average rates tool to compare car insurance quotes to find out what you can expect to pay. Enter a ZIP code to see the average premium for the location. You will also get the highest and lowest rates from the six major carriers surveyed. This way, you can tell if you should keep shopping for a lower rate.

New Jersey Car Insurance

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Basic NJ car insurance

The basic policy, which is the cheapest car insurance in NJ, meets only the minimums needed to drive legally in the Garden State. Though you can drive with a basic policy, they are hard to find, as most insurance companies only issue standard policies. A basic policy consists of:

  • Property damage liability coverage of $5,000. Covers, up to your limits, damage you cause to other cars or property.
  • Personal injury protection (PIP) of $15,000 per person, per accident. Pays for medical expenses for you and your passengers and those you give permission to drive your car. It also covers you and your family members if you are injured while riding in someone else's car or if struck by another vehicle while on foot. PIP is sometimes called “no-fault insurance” because it kicks in regardless of who is at fault.

The basic NJ car insurance policy covers your own injuries and a small amount of damage to other cars you hit, which makes it suitable only for those who have little savings or few other assets. There is an option to add $10,000 in bodily injury liability, but uninsured motorist coverage is not available. Your right to sue for pain and suffering is limited to severe or permanent injuries.

Standard NJ auto insurance

For most drivers, we recommended New Jersey's standard policy, which includes:

  • Bodily injury liability of at least $15,000 per person, up to $30,000 per accident. This pays, up to your policy limits, for injuries that others receive in an accident caused by you or other drivers listed on your policy. If you have substantial savings, a home or a business, you should raise those limits even higher.
  • Property damage liability of at least $5,000. Covers damage to other’s property and cars. This can be raised, and should be.
  • PIP of $15,000 per person or accident; this can be raised as high as $250,000.
  • Uninsured and underinsured bodily injury motorist coverage equal to your liability limits. Helps to cover costs for injuries when hit by uninsured drivers and those with little coverage.
  • Underinsured motorist property damage of at least $5,000. Covers damage to your car when in an accident with a driver with insufficient coverage.

Holders of a standard NJ auto insurance policy can choose between the limited right to sue and the unlimited right to sue. The unlimited option means you retain the right to sue for pain and suffering over any injury.

With both the basic and standard New Jersey car insurance policy, your medical bills and lost wages are paid up to your limits by your PIP coverage and then by any bodily injury liability claim or lawsuit brought against the at-fault driver.

Regardless of the limit you have chosen, PIP will pay up to $250,000 for certain severe injuries, such as damage to the spinal cord or brain.

Cheap auto insurance in NJ

If you buy the standard required state minimum policy, here are rates, on average, by age and gender:

Age

Rate for women

Rate for men

18

$2,192

$2,329

19

$1,572

$1,668

20

$1,432

$1,547

21

$1,161

$1,275

22

$1,085

$1,156

23

$1,053

$1,078

24

$1,009

$1,040

25

$840

$880

35

$846

$779

45

$836

$780

55

$762

$738

65

$696

$700

75

$714

$719

85

$761

$766

Average rate for all ages

$1,068

$1,104

*The table shows the average annual rate of 10 ZIP codes in the state from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data provided for CarInsurance.com by Quadrant Information Services.

Full coverage: adding collision and comprehensive

The cheapest car insurance in NJ may not be the best car insurance for your particular situation. If you have a new car or assets, you should have full coverage. The Insurance Information Institute recommends 100/300/100 in liability. 

Collision and comprehensive, which protect your own vehicle, can be added to either a basic or standard policy:

  • Collision: Pays for damage to your car from an accident. The average annual cost for collision coverage in NJ is $356, according to the Insurance Information Institute (III).
  • Comprehensive: Pays to replace stolen cars and for damages to your car from theft, fire, flood waters, hail, animal strikes, falling objects and vandalism. The average annual cost for comprehensive coverage in NJ is $118, according to the III.

You have to choose a deductible if you buy comprehensive or collision coverage. A deductible is the amount you pay when you file a claim before your insurance company pays out. For example, if your deductible is $1,000 and your car sustains damages totaling $2,500, you will pay $1,000 and your insurance company will pay $1,500. Your insurance rate will be lower if you choose a higher deductible. Typically, you can choose a deductible of $250, $500 or $1,000. If you choose a high deductible, be sure you have the cash saved to pay the deductible in case you have to file a claim to get your car fixed.

Buying more liability coverage with comprehensive and collision is more costly, but generally won’t be that much more expensive. Here are how rates compare on average for minimum standard coverage and full coverage of 100/300/100 with optional coverages:

 

Minimum standard liability

Full coverage with $1,000 deductible

Annual extra cost for full coverage

Monthly extra cost for full coverage

Women

$1,068

$2,273

$1,205

$100

Men

$1,104

$2,482

$1,378

$115

Car insurance quotes NJ

Regardless of how much coverage you buy, it pays to shop around to get the lowest price. Rates vary greatly by insurer because car insurance companies use different methods to determine how much you pay. Here is how much the highest and lowest quote among six carriers differed for the same driver in the following neighborhoods. The rate difference is how much you can overpay if you don’t compare quotes:

 

ZIP code

Highest rate

Lowest rate

Amount you may overpay

Alpine

07620

$1,518

$903

$615

Basking Ridge

07920

$1,254

$659

$595

Clifton

07102

$1,900

$1,223

$677

Edison

08817

$1,490

$949

$541

Jersey City

07307

$1,998

$1,198

$800

Newark

07114

$2,108

$1,430

$678

* Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. 

Credit and your car insurance: rules and exceptions for NJ insurance scores

Some, but not all, car insurance companies in NJ use a system called “insurance scoring” to help calculate how much your rate will be. Your insurance score is mostly based on information taken from your credit report. That means your financial history can influence how much you pay for car insurance.

The insurance score is just one factor insurers use to determine your rates. It is considered along with your age, driving record, where you live, the type of car you drive, among other things. But when developing your insurance score, insurers cannot use the following information: race, ethnicity, sex, religion, income and address. Unpaid medical bills and the number of credit inquiries for home or car loans made in the past 30 days are also exempt from consideration in your insurance score.

Your insurance score will be a number between one and 999. The higher your score, the better, and the lower your rate will be. If your car insurance company uses scores, it must notify you and also tell you what factors are considered. These may include failure to pay credit card bills or bankruptcy filings.

There are also exceptions for some life events that may contribute to you having trouble with your credit. To that end, insurers must exempt bad credit histories that are the result of:

  • Catastrophic illness or injury
  • Death of a spouse, child, or parent
  • Temporary loss of employment
  • Divorce
  • Identity theft

 

Auto insurance NJ: How accidents, credit, adding teens and lapsed coverage hike rates

So how much does having bad credit ding your rates? It’s not nearly as bad as adding a teen to your policy, but it’s much worse than having an accident or letting your coverage lapse. Here are how rates, compare on average, for NJ drivers after the following incidents:

 

Clean driver rate

Rate after incident

$ difference

One bodily injury accident

$1,348

$1,728

$380

One property damage accident over $1,000

$1,348

$1,659

$311

Coverage lapse of 60 days

$1,348

$1,703

$355

Add 16-year-old female teen

$1,348

$3,808

$2,460

Add 16-year-old male teen

$1,348

$4,377

$3,029

Poor credit

$1,348

$2,001

$653

*The table shows the average annual rate of 10 ZIP codes in the state from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for CarInsurance.com by Quadrant Information Services.

NJ car insurance laws

Speeding tickets

If you are cited for speeding, points will be tacked on your license as follows:

  • 1 to 14 mph over limit – 2
  • 15 to 29 mph over limit – 4
  • 30 mph or more over limit – 5

Typically insurers review your driving record upon renewal, and will raise your rates if you have a speeding ticket. This higher rate typically lasts for three years. A speeding ticket in NJ will raise your rates, on average, by 27 percent, according to our analysis of rates based on Quadrant Information Services data.

NJ Points and surcharges

New Jersey uses a point system to record driving infractions. You can review a list of all the New Jersey points for citations online. If you get six or more points within three years on your driving record, you will be assessed a surcharge. This means you’ll be fined $150 plus $25 for each additional point for three years.

If you get 12 or more points on your record, your license will be suspended. You will receive a suspension notice by mail.

Getting points on your license may also increase your insurance rates. Insurers typically review your record upon policy renewal and may hike your premium if you have a moving violation.

You can view your NJ driving record online by visiting the New Jersey Motor Vehicle website.

How to remove points from your NJ driving record

If you maintain a clean driving record for a year, points will be shaved off your record. You can also take driving courses approved by the MVC.

Deduction

Points

Restrictions

One year with no violations or suspensions

-3

Year begins on date of violation or most recent restoration

Defensive Driving Program

-2

May be used to subtract points once every five years

Driver Improvement Program

-3

May be used to subtract points once every two years

Probationary Driver Program

-3

 

NJ Special Automobile Insurance Policy (SAIP)

The SAIP program is designed to help low-income drivers afford limited car insurance coverage. If you are currently enrolled in federal Medicaid with hospitalization you qualify for SAIP. A policy through SAIP costs $365 a year and covers:

  • Emergency treatment immediately following an accident
  • Treatment of serious brain and spinal cord injuries up to $250,000
  • It also provides a $10,000 death benefit

For help purchasing a SAIP policy, call the customer service number at 1-800-652-2471.  

Eligibility points in NJ

Auto insurance companies assign motorists eligibility points for traffic violations, at-fault accidents and suspensions. Also, newly licensed drivers, regardless of age, are assigned three "inexperience" eligibility points. For each year of experience the driver gets, one point is removed. To be considered for the voluntary insurance market in New Jersey, you need to accumulate fewer than seven insurance eligibility points in the preceding three years.

NJ Personal Automobile Insurance Plan (PAIP)

The New Jersey Personal Automobile Insurance Plan (PAIP) was created to help high-risk drivers who can’t find an insurer to sell them a policy. The insurance companies in the PAIP pool cannot refuse coverage to high-risk drivers, but may charge more the policy.

In the NJ auto insurance market, eligibility points are assigned to drivers by the insurance companies. Points are for tickets, at-fault accidents and suspensions. You may be refused coverage if you exceed seven points in the past three years. That’s where the PAIP comes in. If you have tried and failed to buy car insurance in the open market at least twice in the last 60 days, you can buy a PAIP policy.

The same two types of policies you’d find regularly, a Basic or Standard, are available through the PAIP. Because you are a high-risk driver, you will pay higher rates. To find out PAIP rates and get help buying a policy you can call the customer service number at 1-800-652-2471.

Typically, a PAIP policy lasts three years. When that time is up, if your eligibility points drop under seven, you are free to buy a policy on the open market. If you’re still considered a high-risk, your PAIP insurer may renew your policy or you will have another PAIP insurer assigned to you that will sell you a new policy.

DUI's effect on insurance rates in New Jersey

Here are the fines and penalties if you are convicted of drunken driving:

Alcohol or drug-related DUI with BAC greater than 0.08% but less than 0.10%

License loss

Fines, fees & surcharges

Prison term

Community service, IDRC & Interlock

 

3 months

$250–$400 fine
$230 IDRC* fee
$100 to drunk driving fund
$100 to AERF*
$1,000/year (for 3 years) surcharge
$75 to Neighborhood Services Fund

Up to 30 days

12–48 hours IDRC*

 

*IDRC - Intoxicated Driver Resource Center *AERF - Alcohol Education and Rehabilitation Fund

How long a DUI affects your insurance rate depends on your company, but car insurers typically consider offenses for three to seven years. The average rate increase in New Jersey for a DUI is 85 percent, according to a CarInsurance.com analysis of data commissioned from Quadrant Information Services. While you will pay more, you can still save by shopping for the insurer with the lowest rate.

New Jersey DUI car insurance rates by company

Company

Clean driver rate

DUI rate

Dollar increase

% increase

Company 1

$999

$1,709

$710

71%

Company 2

$1,747

$2,137

$390

22%

Company 3

$1,221

$5,439

??$4,218

345%

Company 4

$1,868

$2,581

$1,413

121%

*The table shows the annual rate for Newark ZIP code 07003 from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Two insurers refused coverage for a driver with DUI.

NJ car insurance companies and codes

The State of New Jersey Department of Banking and Insurance lists all the car insurance companies that sell policies in NJ, along with the respective contact information for each one. The code for each NJ car insurance company is at the State of New Jersey Motor Vehicle Commission website.

Inspection sticker law

Driving with an expired inspection sticker in New Jersey typically comes with a $150 fine and your registration privileges may be revoked.

Uninsured motorist penalties for New Jersey

You may have to pay $300 to $1,000 in fines, have your license suspended and be required to do community service.

Age restrictions

In New Jersey, you must be at least 17 to register and title a vehicle in your name. There is not a minimum age requirement for obtaining auto insurance if you have your license or permit, but minors will normally need a parent or guardian to sign any insurance paperwork since it is a legal binding document.

Largest car insurance companies in New Jersey by market share

Rank Company / Group Direct Premiums Written ($) Market share (%)
1 Berkshire Hathaway Insurance 1,117,442 16.37
2 Allstate Insurance Group 939,226 13.76
3 NJM Insurance Group 926,316 13.57
4 Progressive Insurance Group 622,806 9.13
5 State Farm Group 595,864 8.73
6 Palisades Group 539,052 7.90
7 Liberty Mutual Insurance Companies 524,584 7.69
8 USAA Group 233,209 3.42
9 Travelers Group 228,815 3.35
10 Farmers Insurance Group 194,420 2.85
Source: A.M. Best market share rankings are based on direct premiums written in 2013.