Car Insurance in New Jersey
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Introduction: Car Insurance in New Jersey
New Jersey has over 6.5 million licensed drivers, making car insurance a necessity for residents. Whether you’re navigating Newark’s busy roads, commuting in Jersey City, or traveling through suburban highways, car insurance in New Jersey is legally required and provides essential financial protection.
New Jersey is a no-fault insurance state, meaning drivers must first rely on their own insurance for medical expenses after an accident. According to the National Association of Insurance Commissioners (NAIC), the average annual cost of full coverage in New Jersey is $1,891, higher than the national average of $1,674.
New Jersey Car Insurance Requirements (State Laws & Minimum Coverage)
Minimum Liability Coverage (15/30/5 Rule)
According to the New Jersey Department of Banking and Insurance (DOBI), drivers must carry at least:
✔ $15,000 for bodily injury per person
✔ $30,000 for bodily injury per accident
✔ $5,000 for property damage per accident
✔ Personal Injury Protection (PIP): Minimum of $15,000 per person, up to $250,000 for severe injuries
✔ Uninsured/Underinsured Motorist Coverage (UM/UIM): Not required but recommended
Why Minimum Coverage May Not Be Enough:
- Medical bills from an accident can exceed $15,000 per person.
- Vehicle repair costs may be higher than $5,000, especially for newer cars.
- New Jersey has many uninsured drivers, making Uninsured/Underinsured Motorist (UM/UIM) coverage highly advisable.
Recommended Full Coverage for Better Protection
Many New Jersey drivers opt for full coverage, which includes:
| Coverage Type | What It Covers | Recommended For |
|---|---|---|
| Collision Coverage | Pays for damage to your car in an accident | Drivers with new or financed vehicles |
| Comprehensive Coverage | Covers theft, vandalism, and weather damage | Essential in urban areas and storm-prone regions |
| Uninsured/Underinsured Motorist (UM/UIM) | Covers injuries from uninsured drivers | Crucial in NJ due to many uninsured drivers |
| Medical Payments Coverage (MedPay) | Covers medical expenses regardless of fault | Beneficial for drivers with limited health insurance |
Average Cost of Car Insurance in New Jersey
Car insurance rates in New Jersey vary based on location, driving history, and vehicle type. Below is an average cost breakdown:
New Jersey Car Insurance Cost by Coverage Type
| Coverage Type | Average Annual Cost |
|---|---|
| Minimum Liability | $947 |
| Full Coverage | $1,891 |
Car Insurance Costs by Major New Jersey Cities
| City | Minimum Coverage | Full Coverage |
|---|---|---|
| Newark | $1,500 | $3,200 |
| Jersey City | $1,400 | $3,000 |
| Paterson | $1,350 | $2,900 |
| Elizabeth | $1,320 | $2,850 |
| Edison | $1,150 | $2,400 |
| Trenton | $1,250 | $2,700 |
| Camden | $1,300 | $2,800 |
| Clifton | $1,200 | $2,500 |
| Cherry Hill | $1,100 | $2,300 |
| Bayonne | $1,170 | $2,450 |
Car Insurance Costs by Age Group
| Age Group | Minimum Coverage | Full Coverage |
|---|---|---|
| 16-19 Years | $5,200 – $7,500 | $9,000 – $11,800 |
| 20-24 Years | $2,900 – $4,100 | $6,200 – $8,200 |
| 25-34 Years | $1,800 – $2,900 | $4,000 – $5,600 |
| 35-44 Years | $1,500 – $2,300 | $3,700 – $5,100 |
| 45-54 Years | $1,400 – $2,100 | $3,400 – $4,700 |
| 55+ Years | $1,300 – $2,000 | $3,200 – $4,500 |
✔ Teen Drivers (16-19 Years): Pay the highest premiums due to inexperience and high accident risks. Many insurers offer good student discounts to help lower costs.
✔ Young Adults (20-24 Years): Rates decrease as driving experience improves but remain higher than mid-age drivers.
✔ Mid-Age Drivers (25-49 Years): Experience the lowest insurance premiums due to lower accident risks and a longer driving history.
✔ Senior Drivers (70+ Years): Rates increase again due to slower reaction times and medical conditions.
Factors Affecting Car Insurance Rates in New Jersey
Several factors influence car insurance rates in New Jersey, including:
- Driving Record: Accidents, DUIs, and speeding tickets significantly impact premiums.
- Location: Urban areas like Newark and Jersey City have higher rates due to congestion and theft.
- Credit Score: New Jersey insurers consider credit history when calculating rates.
- Annual Mileage: More miles driven increases accident risk.
- Vehicle Type: High-performance and luxury vehicles cost more to insure.
- Weather Conditions: New Jersey’s coastal storms and flooding contribute to higher insurance claims.
- Coverage Level: Full coverage is more expensive but offers better financial protection.
Best Car Insurance Companies in New Jersey (2025)
Finding the right insurer depends on affordability, coverage, and customer satisfaction. Here are some top options:
| Company | Best For | Average Annual Cost (Full Coverage) |
|---|---|---|
| GEICO | Cheapest Rates | $1,750 |
| State Farm | Best for Customer Service | $1,900 |
| Progressive | Best for High-Risk Drivers | $2,100 |
| Allstate | Best Full Coverage Options | $2,300 |
| USAA (Military Families) | Lowest Rates for Military | $1,600 |
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FAQs
New Jersey law requires 15/30/5 liability coverage: $15,000 per person for injuries, $30,000 per accident, and $5,000 for property damage, plus Personal Injury Protection (PIP).
The average minimum coverage costs around $79 per month, while full coverage averages $158 per month.
Smaller cities like Cherry Hill and Edison tend to have lower rates compared to Newark and Jersey City.
No, New Jersey does not require uninsured motorist coverage, but it is highly recommended.
Yes, but high-risk drivers may face higher premiums. Defensive driving courses and shopping around can help lower costs.
Sources
About the Author
Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.