What car insurance costs in New Jersey

New Jersey's average bill against the U.S.

The National Association of Insurance Commissioners (NAIC) publishes average premiums by state from insurers' own reports. Its 2023 figure for New Jersey is $1,573 per insured car, 11% more than the $1,411 of 2022. That average covers liability-only and fully insured cars together; a car with all three main coverages averaged $1,693.

Liability drives the difference. At $1,033 it is about 40% above the national figure, while collision is only about 6% higher and comprehensive is about 29% lower. These are 2023 numbers, so they predate the January 2026 step up in required liability limits described below.

What a New Jersey Standard Policy must include

Under P.L.2022, c.87, signed on August 5, 2022, minimum liability rose in two steps. Policies issued or renewed from January 1, 2023 needed 25/50/25. From January 1, 2026 the floor is $35,000 per person and $70,000 per accident for bodily injury, with property damage unchanged at $25,000. The Department of Banking and Insurance (DOBI) reminded insurers of the second step in Bulletin 25-06.

• Personal injury protection (PIP) pays medical bills after a crash. DOBI's buyer's guide lists medical limits from $15,000 to $250,000 and deductibles from $250 to $2,500, with a 20% copayment on costs between the deductible and $5,000.
• Health insurance as primary can cut the PIP cost if your health plan will pay first. Medicare and Medicaid can't be used for this option.
• Uninsured/underinsured motorist coverage is required at a minimum amount, and a Standard Policy can carry it up to your liability limits.
• Right to sue: the limited option, which allows pain-and-suffering suits only for listed permanent injuries, costs less than the unlimited option.

Each of these choices moves the premium, and the cheaper settings shift risk back to you. Our page on limits and deductibles helps you decide which trade-offs fit your savings and health coverage.

The Basic Policy and the $365 Medicaid policy

Both cover far less than a Standard Policy: with no bodily injury liability, or only $10,000 of it, a serious crash you cause can leave you personally exposed for the rest. Weigh that before choosing on price alone. Our guide to state low-cost programs compares New Jersey's options with those in other states.

Credit and the residual market in New Jersey

DOBI's consumer guide to insurance scoring says insurers that use it must tell policyholders, list the factors involved and file their scoring model with the Department. Scoring can't be the only factor in a rate, can't consider race, ethnicity, sex, age, religion, income or address, and can't be used at all for Basic Policy or Dollar-a-Day customers. A driver with no credit history can't be put in a below-standard tier for that reason alone, and insurers must make exceptions for events such as catastrophic illness, divorce or identity theft. See how credit-based scores work.

Drivers who can't find coverage in the regular market can apply through the New Jersey Automobile Insurance Plan (NJAIP), an assignment mechanism run by a governing committee under a plan of operation approved by the Commissioner. A licensed agent can submit the application; our page on assigned risk plans explains what to expect.

Ways to trim a New Jersey premium

1. 1 Get quotes on identical settings. Fix the liability limits, PIP limit and deductible, health-primary choice and right-to-sue option before you compare; otherwise the numbers can't be lined up.
2. 2 Test the PIP deductible and health-primary option. DOBI lists both among the ways to lower the cost, but check that your health plan actually pays first for car-crash injuries.
3. 3 Raise the physical damage deductible if you can afford it. The deductible break-even calculator shows how many claim-free years it takes to come out ahead.
4. 4 Call DOBI if something is wrong. The Consumer Hotline is 800-446-7467; the Department's main number is 609-292-7272.

Questions drivers ask