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.
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:
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.
For most drivers, we recommended New Jersey's standard policy, as explained below.
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:
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.
The cheapest car insurance in NJ may not be the best car insurance for your particular situation.
Use our How Much Car Insurance Do You Need? tool to get a recommendation on how much coverage you need.
We recommend you buy more insurance than is required to legally drive a car in your state, especially if you have savings and assets. The more money you have, the more likely you are to be sued following a car accident should your insurance be insufficient to cover all the expenses. If your net worth is:
If you're leasing or financing your car, you must get coverage of 100/300/100 or higher.
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. 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. These are optional coverages.If your car is:
If you buy comp and collision, check our guide to choosing a deductible amount.
These coverages are required in New Jersey and should match the liability limits you choose. Uninsured motorist coverage and underinsured motorist coverage pays for damages if you’re hit by a driver with no insurance or a driver with coverage that’s insufficient to pay for your repairs and medical expenses.
Medical payments coverage can help pay for the medical or funeral expenses of covered drivers and passengers after an accident, regardless of fault, up to $25,000. New Jersey requires you to carry PIP, so MedPay isn’t a must-have coverage. MedPay is an optional addition to your car insurance policy. MedPay does the following:
If you and your passengers:
If you don’t own your car outright and have an accident, gap insurance pays the difference between the cash value of your car and the current outstanding balance on your loan or lease.
Below you'll see average annual rates for New Jersey, ranked cheapest to most expensive, for three coverage levels:
Company | State minimum average annual rate |
21st Century | $443 |
Geico | $508 |
Progressive | $755 |
Allstate | $781 |
State Farm | $897 |
Company | 50/100/50 average annual rate |
21st Century | $448 |
Geico | $639 |
Progressive | $858 |
Allstate | $888 |
State Farm | $1,059 |
Company | 100/300/100 average annual rate |
21st Century | $762 |
Geico | $1,104 |
Progressive | $1,255 |
Allstate | $1,761 |
State Farm | $1,847 |
Scores are based on Insure.com’s “Best Insurance Companies” customer review survey of 3,700 customers. Companies not in the top 10 of market share do not qualify. All scores are out of 100.
Best customer service:
Best claims service:
Best value for the price:
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.
If you are cited for speeding, points will be tacked on your license as follows:
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.
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.
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:
For help purchasing a SAIP policy, call the customer service number at 1-800-652-2471.
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.