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 New Jersey, but offers limited coverage. The standard policy costs more, but provides sufficient coverage.
The average car insurance rate in New Jersey is $1,346 a year. The severity and frequency of claims in your neighborhood, your driving record, the type of car you drive and other variables are used by insurance companies to figure out the cost of your policy. That’s why the price for the same coverage can vary significantly among insurance companies — and why you should compare rates. For example, drivers in Newark ZIP code 07199 can save $1,654 by shopping around. That’s because the highest rate among six carriers is $2,734 for that neighborhood, compared to $1,080, the lowest. When shopping for car insurance, use our average car insurance rates tool to compare rates. Enter a ZIP code to see the average premium for your neighborhood. You will also see the highest and lowest rates for up to six major carriers surveyed to get an idea of what the most affordable car insurance price is in your area. For a more customized rate, choose from among six age groups and three coverage levels.
Cheap car insurance in New Jersey
New Jersey car insurance requirements for basic coverage
| State law requires the following coverages: | |
| Minimum property damage liability | $5,000 |
| Personal injury protection (PIP) | $15,000 |
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, as explained below.
New Jersey standard car insurance requirements
| State law requires the following coverages: | |
| Minimum bodily injury liability | $15,000/$30,000 |
| Minimum property damage liability | $5,000 |
| Uninsured/underinsured motorist bodily injury/uninsured motorist property damage | $15,000/$30,000/$5,000 |
| Personal injury protection (PIP) | $15,000 |
Standard policies include:
- 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.
It does cost more to buy more protection, but as you’ll see in the chart below, it usually isn’t cost prohibitive. Increasing your insurance from the state minimum to full coverage with a $500 deductible costs, on average, $669 more, or $56 a month.
| Coverage limits | Average annual rate |
| Liability Only – state minimum | $677 |
| Liability Only - 50/100/50 BI/PD | $779 |
| Full Coverage - 100/300/100 BI/PD $500 Comp/Collision deductible | $1,346 |
*The table shows the average annual rate of nearly every ZIP code in New Jersey from up to six major insurance companies. Rates are for a male driver, age 40, with a clean record and good credit for a 2016 Honda Accord. Data was provided for CarInsurance.com by Quadrant Information Services.
Recommended car insurance coverage
The cheapest car insurance in NJ may not be the best car insurance for your particular situation.
Car insurance companies by market share for New Jersey
| Rank | Company Name | Direct premiums written | Market share % | Overall Customer Review Ranking |
| 1 | Geico | 1,321,895 | 18.65% | 88.1 |
| 2 | NJM Insurance Group | 906,558 | 12.79% | n/a |
| 3 | Allstate Insurance Group | 888,108 | 12.53% | 87 |
| 4 | Progressive Insurance Group | 726,001 | 10.24% | 89.6 |
| 5 | State Farm Group | 611,174 | 8.62% | 90.4 |
| 6 | Palisades Group | 566,344 | 7.99% | n/a |
| 7 | Liberty Mutual Insurance Companies | 511,246 | 7.21% | 86.4 |
| 8 | USAA Group | 263,872 | 3.72% | 97.2 |
| 9 | Travelers Group | 234,443 | 3.31% | 91.2 |
| 10 | Farmers Insurance Group | 226,448 | 3.19% | 81.8 |
Source: A.M. Best market share rankings are based on direct premiums written in 2015.
Customer review rankings based on Insure.com's 2016 "Best Insurance Companies" survey of 3,700 customers. Scores out of 100.
New Jersey car insurance laws and resources
Speeding tickets
If you are cited for speeding, points will be tacked on your license as follows:
- 1 to 14 mph over limit – 2 points
- 15 to 29 mph over limit – 4 points
- 30 mph or more over limit – 5 points
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.
NJ Special Automobile Insurance Policy
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.