Whether you just purchased a new vehicle in New Jersey or are looking to move there from another state, it’s important to know what you can expect to pay for auto insurance. Rates vary from one state to the next, and the individual requirements for mandatory coverage also vary from one location to another. By knowing what is required in New Jersey, you can choose a car insurance policy that will suit your needs.

How much is car insurance is New Jersey?

The average cost of a car insurance policy in New Jersey is $1663 a year, ranking it 18th in the nation for auto insurance. These policies are slightly more expensive than neighboring states like New York and Pennsylvania, but substantially less expensive than California.

There are several factors that contribute to the cost of car insurance in any given area. One of the largest contributors to insurance rates is the number of licensed drivers operating at any time. New Jersey has the 11th higher number of licensed drivers of any state, trailing behind New York (4th highest) and Pennsylvania (5th highest) by a substantial amount.

Although there are fewer drivers in New Jersey, there are substantially more uninsured motorists than in neighboring states; approximately twice as many drivers travel without car insurance in New Jersey than in New York. Drivers who fail to maintain insurance coverage cause the rates of those with insurance to raise in order to compensate for the cost.

There are other factors influencing the cost of insurance in New Jersey. The state has a low rate of auto theft, accounting for none of the most theft-prone cities in the country. Crime rate in general varies from one neighborhood to another; zip codes with high rates of property crime and vandalism will have slightly higher rates than neighborhoods with no crime.

Weather also plays an important role in determining the cost of auto insurance in a given area. Being a northern state, New Jersey does get some harsh winter weather; snow and ice can lead to auto accidents, correlating to slightly higher rates than areas without this risk.

New Jersey Car Insurance Requirements

At a minimum, New Jersey requires that drivers maintain a minimum bodily injury liability insurance of $15,000/$30,000 per accident and seperate property damage liability with a minimum of $5,000 in coverage. This means that if you cause an accident, the car insurance company will pay up to your liability limit for any damage or injuries you cause. Anything over this amount would be your responsibility to pay out of pocket and could lead to you being sued or sent to collections.

The limits of liability in New Jersey are very low, much lower than those in New York. If possible, you may wish to purchase a policy with higher limits. This will protect your assets from a lawsuit in the event that you do cause a car accident.

In addition to liability insurance, you must also carry personal injury protection coverage with at least a $15,000 limit. This pays for injuries you sustain in an auto accident, regardless of who is at fault. In New Jersey, you may be able to receive up to $250,000 in benefits for certain types of traumatic injuries regardless of your PIP limits, but it’s still a good idea to carry enough PIP coverage to pay for regular needs. In New Jersey, if you sustain injuries as a result of a car accident, you cannot sue for these injuries unless you carry medical coverage on your own insurance policy.

Depending on the age of your vehicle, you may also wish to purchase full coverage insurance. Full coverage auto insurance includes collision and comprehensive coverage as well as basic liability. This will allow you to pay for the cost of your own repairs if your vehicle is involved in an accident. If you’re making payments on the vehicle, you will need to carry full coverage until the auto is fully paid for; otherwise, you have the choice whether or not to insure your vehicle with first-party coverage.

How to reduce your car insurance cost in New Jersey

Due to its relative expense compared to neighboring states, you may need to make some adjustments to your policy in order to maintain the same insurance rates if you’re moving from a less expensive state. An easy option is to raise your collision and comprehensive deductible; this increases the amount you must pay toward your own vehicle’s repairs, but may be worth it over the lifetime of your policy.

You may also be able to enjoy a policy decrease by keeping your vehicle parked in a garage rather than on the street, or if you add additional safety features to your vehicle. You can also take advantage of any safe-driving discounts you may qualify for. Sometimes you can receive additional discounts by taking a defensive driving course as well.

You can ask your car insurance company or local agent if there any discount programs you may be able to take advantage of. If you haven’t purchased insurance in New Jersey yet, you can comparison shop online to find the best rate for the coverage that you need.