Auto Insurance

Best Car Insurance in New Jersey

Best Car Insurance in New Jersey
Written by amirhuxain

Residents of the Garden State, are car insurance costs driving you mad? You may be paying too much to insure your vehicle. Find out what other drivers in the state are paying and where you can get the best car insurance in New Jersey.

What’s the most important thing to think about when choosing an auto insurance policy in New Jersey? While priorities vary from driver to driver, there are a few key factors. Namely, you want to find a company that offers you the right amount of coverage at the right pice.

However, buying auto insurance is about more than just the price tag. It’s important to also find a company that offers excellent customer service, reliability, and even features that will protect you every time you get behind the wheel. Finding coverage that doesn’t break the bank is important, but it’s even more important to go with a company that will protect you when the time comes to file a claim.

Compare Car Insurance Plans in New Jersey

All of the research involved with finding that perfect company can make your head spin, though. Plus, it can take forever to sift through all of the data, determining how much you should expect to pay, and which company can give you exactly what you need. Luckily, that’s what we are here for.

We have invested hours of research into all things auto insurance in the state of New Jersey, bringing you this comprehensive guide. We have pored over pricing data, customer service ratings, state policies and laws, and even applicable penalties. By the time you finish reading, you’ll know the companies that can provide you the best coverage, who is likely to offer the best rates, and the laws you’ll need to follow along the way.

Let’s get started, shall we?

Our Top 5 Picks for the Best Car Insurance in New Jersey

When purchasing auto insurance in New Jersey, you have plenty of options. This is great for finding exactly what you need, but also makes the process more confusing.

That’s where we come in.

We have spent hours and hours sifting through the data in the Garden State, so that we can bring you this article. Not only do we cover everything you need to know about buying your auto policy, but we also offer our recommendations for specific companies.

In naming these five “best” companies, though, it’s important to keep in mind that these are based on our opinions and the data that we have found. Your experience may vary, especially once you take into consideration your own personal factors, driving record, and even your location.

Based on our hours of research, consumer ratings, and price quotes provided by the companies themselves, here are our picks for the best New Jersey auto insurance providers:

  • Best Overall Satisfaction: USAA
  • Best Customer Service: The Hartford
  • Lowest Premiums: Esurance
  • Great If You Have a Perfect Record: Hanover
  • Best If You Have a Less-Than-Perfect Record: Allstate

New Jersey Auto Insurance Requirements

Before you ever start looking at prices, discounts, or customer service ratings, there’s one key fact you need to know: how much auto insurance coverage you are required to carry by law. Each state has a different set of rules and regulations, so you’ll need to know specifically what your own state mandates.

For drivers in New Jersey, there are a few different requirements. While you absolutely must carry a policy that meets these minimum limits each and every time you get behind the wheel, you also have the option to buy more coverage (and that’s often recommended). At the very least, though, here’s what you’ll need to carry in order to avoid being an illegal driver in the Garden State.

Standard Policy

New Jersey is unique in that they have two different categories of required coverage. The first is Standard Coverage, and is in line with the coverage types and limits seen for drivers in other states.

Coverage Type (Standard) Minimums
Bodily Injury Liability
Death or injury of one person in any one accident $15,000 minimum
Death or injury of 2+ people in any one accident $30,000 minimum
Property Damage Liability $5,000 minimum
Personal Injury Protection $15,000 minimum

Wondering about the difference between these three requirements: bodily injury, property damage liability coverage, and personal injury protection?

Property damage liability is coverage intended for, as the name suggests, property. It pays to repair or replace someone else’s property following an accident for which you are liable. Property can include things like someone else’s vehicle, their home, buildings, objects, or even signs and structures.

Bodily injury liability is coverage intended for, you guessed it, bodily injuries. It’s meant to cover the medical and/or rehabilitation expenses of others following an accident for which you’re at-fault. There are two different coverage limits, as you’ll notice: $15,000 and $30,000. The former one is intended for the injuries incurred by one person, while the latter limit is intended for two or more people in the same accident.

Personal injury protection covers you, the insured driver, as well as others that are covered by your policy and may be injured in an accident. While the other driver’s insurance company pays for your injuries if they’re at-fault in other states, this isn’t the case in New Jersey.

That’s because New Jersey is a no-fault state. This means that each driver’s insurance company pays for their injuries, regardless of the fault of the accident. Because of this, personal injury protection can help you get the care you need, whether you or the other driver is at-fault.

Basic Policy

Thanks to the Automobile Insurance Cost Reduction Act, it was mandated that drivers in New Jersey be offered the option of a more affordable, Basic Policy option. This lower-cost insurance policy offers even less coverage than the Standard Policy mentioned above, and is technically the minimum required for drivers in the state.

The Basic Policy was designed for drivers with little or no assets, who may have trouble paying for more comprehensive coverage. This makes it a good option for students and young adult drivers who are just beginning to work and establish themselves.

Here’s what you’ll need to purchase in order to be covered under a Basic Policy:

Coverage Type (Basic) Minimums
Bodily Injury Liability
Death or injury of one person in any one accident $10,000 available as an option, but not included under the Basic Policy
Property Damage Liability $5,000 minimum
Personal Injury Protection $15,000 minimum

As we mentioned above, New Jersey is a no-fault state. This means that you will need to purchase medical benefits coverage of at least $15,000, regardless of the type of coverage you choose. This coverage is intended to pay the medical or therapy bills resulting from an auto accident in which you’re involved, regardless of which driver is responsible for the wreck.

Additional Coverage

If you choose a Basic Policy over a Standard Policy, it’s important to note that your coverage options will be limited. For example, if you want to purchase coverage for uninsured/underinsured motorists, this won’t be available to you under a Basic Policy. You’ll have to move up to a Standard Policy to even add this type of optional coverage on to your policy.

Additionally, comprehensive and collision coverage options are always available to Standard policyholders in the state. However, if you hold a Basic Policy, these add-ons may or may not be options for you, depending on the insurer you choose.

Penalties

Okay, so we have talked about the type of coverage that you’re required to carry every time you get behind the wheel in New Jersey. Now, let’s talk about what will happen if you fail to meet these requirements and get caught.

First and foremost, you should know that whether you don’t buy a policy at all or if you buy a policy that doesn’t meet the state’s mandated requirements, you’ll be considered an illegal driver. Uninsured and underinsured drivers get treated the same in most cases.

If you are caught driving without the mandatory liability coverage, there will be penalties involved. In fact, this is one of the biggest driving offenses in the state, and it’s punished accordingly.

If you are stopped for a moving violation or found to not be carrying adequate coverage following an auto accident (even if you’re not at fault), here’s what you can expect in terms of penalties for a first violation:

  • A fine of at least $300 and up to $1,000
  • Community service
  • DMV surcharges of $250 for at least three years
  • A mandatory license suspension of one year

For subsequent violations, the penalties just get worse. After your second violation, you can expect the following:

  • A fine up to $5,000
  • A mandatory jail sentence of 14 days
  • 30 days of community service
  • A mandatory license suspension of two years

After your two-year suspension is up, the DMV won’t just reinstate your license, either. Instead, you’ll need to apply to the Director of the Division of Motor Vehicles for reinstatement.

It’s not only fines and penalties that should worry you when driving without valid auto insurance coverage, though. There’s also the concern of getting in a car accident.

If you get in a wreck and don’t have adequate insurance coverage, you can expect to receive a citation. Following that, the penalties above will kick in, and your license will be suspended accordingly. More importantly, though, is that you’ll need to pay for any damages that may have been caused to others or their property, if you’re at-fault for the accident.

Had you carried adequate auto insurance coverage, your policy would have paid for most, or all, of these expenses. However, since you don’t have auto insurance, you’re now on the hook for the bill. If you can’t afford to pay out of pocket, you’ll likely be sued. This means that your assets–such as your home, vehicle, savings accounts, and more–could be taken away.

But let’s say that you’re driving uninsured and are in an accident that isn’t your fault. No, you won’t need to pay for the other driver’s vehicle or injuries, and their insurance coverage should pay for yours (assuming that they are covered appropriately by a policy of their own). However, if you don’t have adequate coverage in the state of New Jersey, you’ll actually lose your right to sue for damages and/or injuries following the accident.

This means that if the other driver doesn’t have auto insurance or doesn’t have enough coverage to pay your bills following an accident for which they’re at-fault, you can’t even sue them for their assets to cover it. If you fail to maintain state-minimum insurance, you essentially waive your right to sue them. This could be devastating.

Proof of Insurance

As is the case in most states, it won’t be a secret if you allow your auto insurance policy to lapse. In fact, insurance companies are required to notify the New Jersey Motor Vehicle Commission when policies lapse or are cancelled, so they know if drivers are lacking valid policies at any given time.

Thanks to this, you can rest assured that the officer will already know whether or not you have active auto insurance following an accident or during a traffic citation. However, even with this reporting system in place, you are still required to carry proof of your insurance coverage with you every time you get behind the wheel. Failure to do so can result in a citation.

Whether you buy your very first policy or simply renew an existing one, you’ll be given proof of insurance. This comes in many forms, depending on the insurance company and the type of policy purchased. You may get a laminated insurance card mailed to you, you may be emailed or given access to a PDF that you can print out, or you might be able to download an app with mobile access at your fingertips, or all three. However, even if you download an app and have a digital card saved, you’ll still want to keep a hard copy in your vehicle at all times. If your phone dies or is damaged in an accident, you’ll still need to access that proof of coverage when asked.

Regardless of the form of your proof of insurance, it will have a few specific things listed. These include the:

  • Name of the insured
  • Vehicles covered under the policy
  • Policy number
  • Dates of valid coverage
  • Insurance company’s name, address, and phone number

It may also include your coverage limits or other important details about your exact policy.

Average Cost of Coverage in New Jersey

Once you decide how much auto insurance coverage you need and what you expect from your insurer, it’s time to compare prices. For many drivers, this is one of the most important factors, in fact, and you want to make sure that you get the best possible rate for the coverage you choose. So, let’s take a look at what you can expect to pay when buying auto insurance in New Jersey.

According to data from QuoteWizard, the average auto policy in New Jersey costs $1,265.69 annually. This is considerably higher than the national average of $889.01, so that’s something to keep in mind as you go into your search. Of course, this average takes into account all policies purchased in the state, regardless of the vehicles they drive, the history of the driver(s), the area in which they live, and even the amount of coverage chosen.

This $1,265.69 average can be broken down further, though, to give you a better idea of what you can expect. For example, New Jersey drivers spend an annual average of $869.57 on liability-only coverage. This means that if they purchase the state’s most basic, required auto insurance, they’ll pay about that much each year. Drivers also spent an average of $381.86 on collision coverage (covering their vehicle if they’re in an at-fault accident) and $131.35 on comprehensive coverage (if they want to be protected no matter what happens to their vehicle or how).

All in all, New Jersey drivers pay about $104.72 a month for their auto insurance.

Coverage Rates
Liability $869.57
Collision $381.86
Comprehensive $131.35
Total Cost Per Year $1,265.69
Price Per Month $104.72

Of course, these numbers are just averages. You can (and should) expect that your own policy will vary from this, based on any number of personal factors. Your location, driving history, vehicles covered, and even your age and marital status can all affect premiums.

Plus, there are discounts offered by some companies that you may or may not qualify for, such as safe driver discounts, student discounts, multiple policy discounts, and even discounts for having more than one driver on the policy.

Cheapest Car Insurance in New Jersey

I know you’ve been wanting to know the answer to this question: which company has the cheapest premiums in New Jersey? Well, we’re here to help you find out.

Of course, this isn’t exactly a black-and-white question, but you probably already realized that. While one insurer may be the absolute best when it comes to insuring a high-risk driver (like that 18-year-old in a sports car or the woman with three accidents in the last two years), it may not offer the best price for your parents. There are variables at play, even when talking about the “cheapest” insurance company in the Garden state.

We didn’t want to leave you hanging, though, so we did some research. We wanted to figure out which companies were consistently priced the lowest, as well as which ones offered the best rates for different types of drivers. Then, based on your own factors, you at least know where to start.

Let’s take a sample driver, who we will name Tom. Tom is 30-years-old and single. He has a clean driving record, drives a 2013 Chevrolet Malibu, and lives in Lakewood.

Very Cheap Cae Insurance

Here’s what we found when we started shopping around for rates for Tom, based on standard, state-minimum coverage.

Insurance Company Annual Premium
Farmers $913
Penn National $996
Esurance $1,236
Allstate $1,404
Progressive $1,412
Encompass $1,740
Metlife $1,864
Mercury $2,288
Plymouth Rock $2,663
Foremost $2,968

How different would Tom’s premiums look if he lived in Newark instead?

Insurance Company Annual Premium
Farmers $1,543
Esurance $1,832
Progressive $1,904
Penn National $2,124
Allstate $2,550
Metlife $2,626
Mercury $2,964
Encompass $3,210
Plymouth Rock $3,267
Foremost not given

As you can see, Tom is stuck paying considerably more for the same coverage, just for living in a more metropolitan area. Either way, though, it appears that he can bank on Farmers and Esurance for consistently having more affordable coverage.

Cost of Auto Insurance in New Jersey

So, how much can you expect to pay for your car insurance in New Jersey? Well, that’s difficult to say. After all, there are literally hundreds of answers to that question, based on your own personal variables.

Things that impact your premiums include your:

  • Age
  • Gender
  • Marital status
  • Driving record
  • Education
  • Vehicle(s) covered
  • Whether your vehicle is financed, leased, or paid in full
  • ZIP code
  • Whether you own or rent your home
  • Miles driven each year and the purpose of those miles (work commute, pleasure, etc.)
  • How much coverage is desired

That’s why it’s impossible to truly give someone an accurate estimate of their auto insurance costs, without knowing each of these factors. Of course, as we already talked about above, the average auto insurance price tag runs about $1,265 a year, across the entire state. If you’re only interested in New Jersey liability coverage, your average steeply drops to just under $870.

We’re not really keen on leaving things that simple, though, so let’s try to narrow down your estimate just a bit more. That way, you can go into your auto shopping journey with at least an idea of what you should pay.

Without knowing all of your personal information, this will be difficult. So, we created four different driver “profiles” to use. Each example driver represents a specific demographic, allowing us to easily compare rates based on the kind of driver one could be. While none of these four drivers is likely to be a perfect match for you and your own personal tidbits, you can still use this as a rough guide before looking for your own coverage.

Our Subjects

We’ve taken four example drivers to use in this pricing example. They all live in Clifton, NJ, in ZIP code 07011. We chose this city because it ranks pretty average in the state when it comes to annual auto insurance costs. This makes it a more accurate indicator, versus choosing a more metropolitan area.

First, we have Little Timmy. He’s a young driver stereotype: 22-years-old, in college, renting an apartment, and has two speeding tickets under his belt from the last couple of years. He drives about 15,000 miles a year in his 2012 Chevy Impala (which is financed), and has average credit.

Next, we have John and Jane Smith, 42. They are both college grads with good credit, who own their home. They drive a 2011 Chevy Equinox (paid off) and a 2014 Toyota Sienna (financed), and drive about 16,000 miles a year each. Neither has any speeding tickets, but Jane did have a small fender bender last year.

Straight-Laced Sally, our third subject, is an insurer’s dream. She’s 35, owns her condo, has excellent credit, and is a college grad. She drives about 10,000 miles a year in her 2010 Toyota Camry and has a clean driving record.

Last but not least is Grandpa Joe. He’s 65 with a clean driving record and good credit. He owns his home and his 1998 Honda Civic, which he drives about 8,000 miles a year.

As we already mentioned, you probably aren’t a perfect match with any of these four subjects. However, there’s probably one you can most relate to. So, with that said, let’s see how their premiums compare in the state of New Jersey, and which insurance companies offer the best rates for each. (Quotes provided by The Zebra and Insurox)

Little Timmy John & Jane Smith Straight-Laced Sally Grandpa Joe
Plymouth Rock $566/mo $117 $64 $77
Mercury $680 $376 $213 $127
Penn National not given $178 $110 $82
Allstate $310 $215 $100 $80
Hanover $885 $118 $55 $43
Foremost $702 not given $164 $92
Metlife $710 not given $141 $97
Progressive $478 $267 $72 $110
Encompass $1,110 $320 $195 $185
Esurance $399 $298 $168 $79

As you can probably tell, the results can vary quite a bit from insurer-to-insurer, just based on your own personal information. However, there are some patterns we can derive. For instance, Hanover was one of the most affordable (if not the most affordable) company for everyone except Little Timmy. And Allstate offered competitive pricing across the board, even if they weren’t the cheapest.

Based on what we see with these results, we can assume that one’s driving record plays a significant impact on premiums (poor Little Timmy had better save his pennies or just plan to take the bus!), followed by age.

New Jersey’s Unique Car Insurance Rules

Every single state puts a unique spin on auto insurance laws. New Jersey, of course, isn’t the exception. There are a few rules and regulations that you’ll find in the Garden State that are different from other states in the country.

Let’s take a look at what you can expect to find when buying insurance in New Jersey, some of which might be different from what you’ll find elsewhere. Some of them might even impact your coverage choices and premiums.

New Jersey’s High-Risk Automobile Insurance Option (NJPAIP)

If you’re a high-risk driver in New Jersey–which usually means that you’ve already lost and/or been denied coverage due to a DUI, accidents, or other driving record issues, or that you’ve failed to pay your premiums with a previous policy–you might not be able to find an insurer that will approve you for new coverage. In this case, you’ll need to turn to the high-risk coverage option offered in the state: PAIP.

NJPAIP was designed for drivers who have had their coverage cancelled, non-renewed, and/or have been denied for a new policy due to certain factors. Since all drivers in New Jersey must carry state-minimum liability in order to get behind the wheel, the PAIP option is a last resort.

As with most state-run, high-risk programs, PAIP doesn’t actually offer insurance policies. Instead, they will match you with an NJPAIP Certified Producer, which is an insurer who will offer you coverage.

Credit Can Be a Factor

As is the case in many states, your credit can be a determining factor when it comes to calculating your auto insurance premiums. New Jersey is one of those states, as you may have already guessed.

This means that potential insurers have the option to run a soft inquiry/credit check on you when calculating your coverage pricing. This shows them your financial history, account status (especially with other insurance companies), and overall creditworthiness.

While insurers can use your credit history to help determine premiums, they cannot cancel existing coverage or deny you coverage based on what they find. They can only adjust your price accordingly.

Your ZIP Code Matters

In most states, your exact location matters. In fact, it’s one of the most important factors when calculating your premiums, as metropolitan areas present a higher risk for insurers than more rural areas. Because of this, your premiums can change when you move to a new city, or even just to a new neighborhood that has a different ZIP code.

Your ZIP code is a secondary factor to things like your personal driving record, age, and the vehicle you drive, but it will have an impact on your premiums in New Jersey.

You Have Low-Income Options

If you live in New Jersey and are eligible for Medicaid based on your income, you could also qualify for the state’s reduced-cost insurance program, SAIP. This program, the Special Automobile Insurance Policy, offers limited auto insurance coverage to residents for a lower price.

In fact, if you qualify for SAIP, you can get medical-only coverage for only $365 a year. The purpose of the initiative is to prevent drivers from foregoing buying insurance based on limited financial resources.

To learn more about SAIP, visit the website here.

Top Car Insurance Companies in NJ

Now, you might be wondering who the most popular auto insurance companies are in the Garden State. Well, you’re in luck–we’ve done the research to find the six insurers with the largest market shares.

Of course, the most popular option doesn’t always equal the best one. Let’s take a look at how each company compares in terms of their financial security and their measured customer satisfaction.

Customer Satisfaction

Being the most popular company says something, as does having the best price. However, your satisfaction with an insurance company ultimately comes down to how well they perform when you actually need them. If their customers are usually happy, there’s a good chance that you will also be happy if you purchase a policy from them.

So, of course, we took the time to look into each company’s actual customer satisfaction ratings. We also looked at their financial security ratings, ensuring that you choose a company that can be there if and when you need to file a claim.

To measure each of these, we looked at two leading authorities in the industry: JD Power and A.M. Best. Both of these companies are respected and provide a comprehensive view of each insurer so that you can make the most informed decision.

State Farm

First up is State Farm, the largest auto insurance shareholder in the state. This company holds a leading 11.1% of the market. It doesn’t rank the highest in customer satisfaction, though:

  • A.M. Best: “A++” (Superior) financial strength rating and “aa+” long-term issuer credit rating
  • JD Power: #13 in the region (out of 14) with only a 2-star overall satisfaction rating

Progressive

Next in our list–in second place–is Progressive, which insures 10.8% of the New Jersey market. Unfortunately, it also brings up the rear of JD Power’s study:

  • A.M. Best: “A+” (Superior) financial strength rating and an “aa” long-term issuer credit rating.
  • JD Power: #14 in the region (of 14 companies compared) with a 2-star overall satisfaction rating

Allstate

Bringing in a strong third place is Allstate. They’re in the middle of the pack for both the number of drivers insured, at 9.3% of the market, as well as their satisfaction ratings:

  • A.M. Best: “A+” (Superior) financial strength rating but “aa-” long-term issuer credit rating.
  • JD Power: #8 in the region with a 3-star overall satisfaction rating

Liberty Mutual

Liberty Mutual accounts for 9% of the New Jersey auto insurance market share. Here’s what customers think about the company:

  • A.M. Best: “A” (Excellent) financial strength rating but “a” long-term issuer credit rating.
  • JD Power: #12 in the region with a 2-star rating in overall satisfaction

Plymouth Rock

The next company, Plymouth Rock, covers only 7.8% of the New Jersey auto insurance market. This makes it the fifth-most-popular insurer in the state. It boasts a few other impressive 5s, however, especially when it comes to satisfaction ratings:

  • A.M. Best: “A-” (Excellent) financial strength rating and an “a-” long-term issuer credit rating.
  • JD Power: #5 in the region with a 5-star overall satisfaction rating

USAA

This members-only company is known for its excellent service and insurance products. Since it’s only available to military members and their families, though, it’s a little less popular. Therefore, USAA holds only 3.7% of the state’s market share. What it lacks in market share, though, it makes up for in satisfaction ratings:

  • A.M. Best: “A++” (Superior) financial strength rating and “aaa” long-term issuer credit rating
  • JD Power: #2 with a 5-star overall satisfaction rating

Need More?

Buying auto insurance can be confusing, whether it’s your first policy or your tenth. If you have more concerns about buying coverage in the Garden State, or have specific questions about the laws of the state, you can visit the New Jersey state auto insurance website.

Topics: Auto Insurance

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