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What Makes Car Insurance So Expensive in New Jersey?


New Jersey ranks pretty high in the states with the highest auto insurance rates. As of January 2022, the cost of full coverage in New Jersey averaged $1,891, which was 7% higher than the national average of $1,771.

While the increasing cost of insurance is a nationwide problem, New Jersey residents face the brunt of it. This guide highlights various factors affecting the cost of insurance in New Jersey and tips on how you can keep your rates low. 

The Factors That Can Affect How Much Your Car Insurance Costs

If you are planning to acquire a car in New Jersey or have just moved from another state with your car, you will need to buy auto insurance. 

However, finding a good deal on auto insurance in New Jersey can be overwhelming, considering the high cost of auto insurance in this state. The good news is that understanding the various factors that affect insurance rates can help you better your chances of getting affordable car insurance

Here are several factors unique to New Jersey:

Pricey Benefits

New Jersey is a no-fault state. This means that a driver files for compensation from their insurer. Under New Jersey’s auto accident benefits clauses, drivers are eligible for up to $250,000 unless they opt for less. 

The minimum coverage in New Jersey is $15,000. This figure is hardly enough if you get in a severe accident. So many drivers opt for higher coverage, pushing the cost of premiums relatively high.

High Cost of Healthcare

According to statistics, the cost of accessing health care increases by 5.5 percent every year. This cost is passed over to the insurance companies as part of recoverable benefits. 

And because insurers exist to make money, they tend to increase their rates as the cost of getting medication increases. Also, the policyholder will usually go for the hospitals that offer the highest quality of care since they know the insurer will foot the bill, which also comes at an added cost.

Severe Weather

Extreme weather is becoming an increasingly big problem in New Jersey. When these extreme weather conditions such as hailstorms, tropical cyclones, and floods cause damage to vehicles, insurers get a huge influx of claims. 

Weather can be significantly unpredictable. As a result, insurers are left with one choice; passing on the risk to consumers by increasing the rates of premiums.


The age factor influences the cost of insurance across all states. However, the rates for new drivers in New Jersey can get insanely high. 

According to recent studies, 16-year-olds can pay as much over $7,800 compared to a $1,497 rate for drivers in their 50s. So if you have a child seeking a car, be prepared to dig deep into your pockets. 

How to Keep Your Rates Low

While insurance rates can be relatively pricey compared to other states, there are a few things you can do to help make your premiums affordable. Your driving history is of massive significance in the cost of insurance. 

With every year you drive accident free, your premiums decrease. The opposite is also true. While you could start with high rates as a new driver, you can bring them down by practicing good driving. 

Some insurers consider a car’s age and safety rating when determining the cost of insurance. So before investing in a car, it would help first to establish how its age and safety rating could affect your insurance cost. 

Also, taking a defensive driving course can make you eligible for lower rates, as most insurers would deem you a low-risk driver. High grades and class attendance can help teen drivers earn discounts. So if you have a teen on their way to acquiring a driver’s license and a car, encourage them to put some effort in class.

One thought on “What Makes Car Insurance So Expensive in New Jersey?

  1. Add to that, car theft. Specifically our challenging locations such as Newark, Paterson, Camden, Passaic, etc.

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