The New Jersey Motor Vehicle Commission (NJMVC) requires all vehicles to have proof of insurance. Three types are mandatory: liability insurance, personal injury protection, and uninsured motorist coverage. NJ is also a “no fault” state, which means all drivers are covered for medical expenses regardless of who caused an accident.
This article will explore how to get the best value for your money when purchasing the three necessary vehicle insurance requirements in NJ.
- Cheapest Car Insurance Companies in New Jersey
- Not to Sue for NonEconomic Losses in New Jersey
- Cheapest Car Insurance Rates by Age
- Cheapest Car Insurance for Drivers with DUI
- Cheapest Car Insurance for Drivers with Bad Credit
- Cheapest Car Insurance by Cities
Cheapest Car Insurance Companies in New Jersey
Having three types of mandatory requirements for auto insurance means that NJ is an expensive place to buy. It is considered the 9th most costly state for auto insurance, with the average annual rate at $1,905 or $159 a month.
But if you shop around, depending on your age, credit rating, place of residence, and type of car, you may find these insurers to offer the lowest below average rates in the State of NJ:
| Insurance company | Average Annual Rates | Average Monthly Rates |
|---|---|---|
| Geico | $995 | $83 |
| Progressive | $1,334 | $111 |
| New Jersey Manufacturers | $1,449 | $121 |
| AllState | $1,527 | $127 |
| Mercury | $2,042 | $170 |
| New Jersey State Average | $2,299 | $192 |
Saving by Agreeing Not to Sue for Noneconomic Losses in New Jersey
A unique feature of New Jersey auto insurance is the option for policyholders to choose a limited right to “Not to Sue for Noneconomic Losses.”
Pain and suffering, depression, or other mental stresses that may be caused by accidents are considered “Noneconomic Losses.” By agreeing to a “limited right” to not sue for these emotional conditions, many insurers will reduce your premiums compared to “unlimited right to sue.” Unlimited lawsuit policies are as much as 30% higher than limited lawsuit policies.
Cheapest Car Insurance by Age
Young drivers, aged 17-20 are the most expensive to insure. In NJ, the average yearly policy for a 17-year old driver is $5740.
As people age, they take on job and family responsibilities, ostensibly leading to safer driving. By age 65, they may work less, and drive fewer miles. By age 75, their reflexes and eyesight may be declining leading to greater risk of accident, and slight increases in premiums.
So rates generally drop off as you age, until you are over 70. Here is a chart showing the average rates in NJ by age group:
| Age | Average Annual Rates | Average Monthly Rates |
|---|---|---|
| 25 | $2,124 | $177 |
| 35 | $1,825 | $152 |
| 45 | $1,691 | $141 |
| 55 | $1,611 | $134 |
| 65 | $1,520 | $127 |
| 75 | $1,598 | $133 |
For the average 40-year-old male with a good driving record (no moving violations, DUI) the auto insurers with the best yearly average rates in NJ were:
- Geico: $1,731 (Average annual rates)
- NJM: $1,424
- Travelers: $1,267
For senior (65y.o.+) drivers the best average, full coverage auto insurance values in NJ, with good credit score, were:
- Geico: $1,359 (Average annual rates)
- Allstate: $1,287
- State Farm: $1,228
- New Jersey Manufacturers: $992
All age groups can save 5% on auto insurance by completing an approved online course in defensive driving certified by the NJMVC. A list of providers is offered here. Mature drivers, over age 55, are also urged to refresh their driving skills and earn discounts with these state sanctioned schools.
Cheapest car insurance companies for drivers with DUI
DUI/Driving Under the Influence (of drugs or alcohol) is a serious and life threatening violation of the law which also raises auto insurance rates. Most states in the US require drivers who commit serious traffic offenses such as a DUI conviction to get SR-22 certification. However, New Jersey is a state that does not require SR-22 certification.
However, there is an impact to insurance rates. $1,000 a year is added for each three years to the cost of automobile insurance. The average rate of yearly auto insurance for a convicted DUI offender is 75% higher than for a non-DUI driver.
But there are still ways for a DUI convicted driver to find better rates on car insurance in NJ. Here are the companies with the best rates:
| Insurance company | Average Annual Rates | Average Monthly Rates |
|---|---|---|
| Geico | $2,109 | $176 |
| Progressive | $1,989 | $166 |
| NJ Manufacturers | $1,587 | $132 |
>>MORE: How to Get Car Insurance After DUI
Cheapest car insurance companies for drivers with bad credit
NJ insurers factor in bad credit scores (under 400) when assessing risks. There will be higher premiums for bad credit scoring drivers and their vehicles.
If drivers with bad credit happen to live in some poorest cities and towns in the state, they would probably have the most expensive car insurance. This is because insurers must pay out higher theft and accident claims in those areas. Newark, Passaic, Paterson, and East Orange are among the most expensive.
Living in Newark, for example, with a bad credit score can cost you dearly.
However, there are auto insurers whose rates are better for those with poor credit ratings in NJ:
| Insurance Company | Average Annual Rates | Average Monthly Rates |
|---|---|---|
| Drive New Jersey Insurance Company | $3,896 | $325 |
| AllState | $3,764 | $314 |
| Geico | $3,587 | $299 |
| Progressive | $3,219 | $268 |
| New Jersey Manufacturers | $1,982 | $165 |
The State of NJ also offers a “Special Automobile Insurance Policy” (SAIP), costing only $365 a year, for those who cannot afford regular insurance. It is available to drivers who are eligible for Federal Medicaid with Hospitalization.
SAIP is really a medical insurance policy and it does not cover vehicle or property damage. However, it does provide up to $250,000 in emergency medical treatment following an accident.
Where You Live in NJ Really Affects Car Insurance Rates
With old industrial towns, leafy suburbs, and beach communities, New Jersey drivers are subject to varying rates of auto insurance, largely dependent on where they live. Here is a rundown of some key cities and rates:
Newark, NJ
Once a mighty powerhouse of manufacturing, Newark, NJ’s largest city, is now a resurgent but still struggling urban enterprise zone of 277,540 people within the NYC metropolitan region. Better rates come from such providers as NJM ($2,038), Progressive ($1,664) and GEICO ($1,413).
Jersey City, NJ
Across from New York City, on the west side of the Hudson River, densely populated Jersey City is the second biggest city in NJ with 270,753 residents. It is connected by tunnels and trains to Manhattan, and has the Statue of Liberty; and the Colgate Clock, fourth largest in the world. A newly renovated waterfront and many corporate tenants make this city a magnet.
Drivers can find fair priced auto insurance rates at NJM ($1,681), Progressive ($1,519) and GEICO ($1,108).
Paterson, NJ
The historic, diverse seat of Passaic County on the Great Falls is the third largest in NJ with 146,000 residents and the second highest density of any city in the US over 100,000 people, right behind NYC.
Auto insurers with good rates include: NJM ($2,065), Progressive ($1,647) and Geico ($1,348).
Edison, NJ
At the juncture of Raritan Bay and the Raritan River, Edison (named after prolific resident and inventor Thomas Edison) is situated like a beating heart in the southwestern corner of the NY Metropolitan area. Criss-crossed by highways, malls, corporate and industrial parks, ranch homes and garden apartments, Edison is a very busy, productive and on-the-go town.
The fifth largest municipality in NJ (99,967) has these auto insurers who provide the best rates: NJM ($1,387), Progressive ($1,385), and GEICO ($1,042).
Princeton, NJ
Princeton is home to the eponymous Ivy League college and is a leafy, historic, prosperous town with a highly educated workforce. As befits this posh setting, the median home is priced at $908,200. And the average rent is $3,600.
Within the safe affluence of Princeton, car insurance is a bargain, some 40-60% cheaper than the state average of $2,446 a year. Allstate ($1,344), Progressive ($1,336) and GEICO ($946) are three insurers with favorable rates for Princeton drivers.
The Ten Cheapest NJ Cities for Car Insurance
Low crime rates and fewer accidents propel these towns into the lowest priced areas in NJ for car insurance:
| New Jersey City | Average Annual Rates | Average Monthly Rates |
|---|---|---|
| New Vernon | $1,859 | $155 |
| Madison | $1,855 | $155 |
| Whippany | $1,860 | $155 |
| Morris Plains | $1,867 | $156 |
| Cedar Knolls | $1,850 | $154 |
| Mt.Freedom | $1,842 | $153 |
| Randolph | $1,849 | $154 |
| Convent Station | $1,852 | $154 |
| Morristown | $1,829 | $152 |
| Brookside | $1,838 | $153 |
Summary
Required Insurance For NJ Drivers:
Three types of insurance must be carried at all times when driving in the state of New Jersey:
- Liability Insurance – pays for damage caused to others when you are at fault after an accident. It does not, however, cover medical expenses.
- Personal Injury Protection (PIP) – this pays for you and your passengers’ medical expenses, who might be injured in an accident, regardless of whose fault it is. “No Fault” Coverage is another way of expressing PIP.
- Uninsured Motorist Coverage – NJ requires coverage to pay for your costs if you’re in an accident with an uninsured motorist.
Minimum car insurance requirements in NJ:
- $15,000 bodily injury per person per accident
- $30,000 bodily injury for all persons injured
- $5,000 property damage liability
- $15,000 uninsured motorist bodily injury
- $30,000 uninsured motorists all bodily injury
- $5,000 uninsured for property damage
In general, the highest rates for auto insurance in New Jersey are in the eastern cities near NYC. As you move west, away from NY, into the less dense regions and smaller towns, the rates drop.
How to keep your car insurance rates lower in New Jersey?
- If you buy a policy with “Limited right to sue” you save money.
- “Unlimited right to sue” raises your premiums.
- DUIs and bad credit cause your insurance rates to skyrocket. Drive soberly, and spend wisely to save.
- The NJMVC certifies “driver refresher courses” that give you a 5% discount on auto insurance.
- There is a special program for Medicaid drivers who cannot afford automobile medical coverage. Ask your broker for $365 a year SAIP policies.
- The cheapest general auto insurers in NJ are (from high to low): Mercury, Allstate, NJM, Progressive and Geico.
- Consider bundling your home and auto insurance together to save money. NJ offers “bundlers” an average savings of 12% a year on combined auto and home insurance policies.
Auto insurance is mandatory but if you are really strained financially a minimum basic auto insurance policy can be helpful.