Claire Smith Last Updated On: July 25, 2023

Your Guide to New Jersey Auto Insurance

New Jersey is a popular place. In fact, it has more people per square mile than any other state. It also has more horses per square mile than other states, but that’s beside the point.

The point is, the Garden State is dense, and that usually translates to higher car insurance rates. More people in a smaller area means a higher risk of accidents.

But calling New Jersey home doesn’t mean you’re stuck shelling out thousands for car insurance against your will. Keep reading, because we have everything you need to know about finding affordable auto insurance in New Jersey without skimping on coverage.

Free Car Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

Table of Contents

New Jersey Auto Insurance Options

If you’ve never thought about what you’re covered for in terms of car insurance, you’re not alone. But understanding your coverage (and your options) is important. And it’s better to do so ahead of time, before anything happens.

Here are the typical car insurance options in New Jersey that you can choose from:

  • Liability: This is broken down into bodily injury, which compensates the other driver for their medical bills in an accident you cause, and property damage, which covers damage to the other driver’s car. It also gives you a legal defense if you’re sued after an accident. Read more here.
  • Collision: If you collide with another vehicle or a stationary object like a phone pole, this helps cover repair or replacement costs for your vehicle. 
  • Comprehensive: If your vehicle incurs damage from weather, theft, vandalism, or hitting an animal, this helps cover repair or replacement costs.
  • Uninsured/Underinsured Motorist: If you’re involved in an accident with a driver who doesn’t have car insurance or doesn’t have enough of it to cover the damages, this helps bridge the gap. 
  • Personal Injury Protection (PIP): Bodily injury coverage only protects the other driver. But PIP helps cover the medical costs of you and your passengers, regardless of who is at fault for the accident. It also helps cover other expenses related to the accident, like lost wages or childcare. 
  • Medical Payments (MedPay): Similarly to PIP, this helps cover medical expenses of you and your passengers. 

Next, we’ll show you what you do need to have in place to meet New Jersey state requirements, but above that you can mix and match coverage types and amounts. This way, you’ll build yourself a comprehensive policy that meets your budget and gives you peace of mind. 

If you want to spice up your policy even more, consider these optional add-ons:

  • Roadside Assistance: If your car breaks down, this covers a tow to a nearby repair shop and minor roadside fixes. 
  • Gap: If your leased or financed vehicle is totalled and the insurance check is less than you still owe on the vehicle, this helps cover the difference. Find out more here.
  • Rideshare: If you drive for services like Uber or Lyft, you need additional rideshare insurance coverage.
  • New Car Replacement: If your new vehicle is totalled, this gets you a brand new vehicle rather than a check for the depreciated value. 
  • OEM Parts: If your vehicle needs repairs, this covers original parts instead of aftermarket versions. 

These are just some endorsements you can add to your policy, but they vary by insurer. Remember: it’s your car insurance policy and it should give you peace of mind, so feel free to customize it to your liking.

Low Cost Auto Insurance in New Jersey

Here’s the thing: the cheapest auto insurance you’ll find is for minimum coverage. This means that you have just enough auto insurance to satisfy the state’s legal requirement and not much else.

This will help you cut your car insurance costs, but it won’t give you much in the way of protection. It’s a bit of a gamble: pay less in premiums now, but pay more out of pocket should anything happen.

If you’re the “walk on the wild side” type, let’s review the minimum coverage requirements in New Jersey. But buckle up: New Jersey is a little different from other states, because instead of a simple minimum requirement, you can choose between two policy types:

  • Basic Policy: You get lower premiums but not as much coverage. A basic policy includes at minimum:
    • Personal injury protection of $15,000 per person per accident
    • Property damage of $5,000 per accident
    • You can choose to add bodily injury liability of $10,000 per accident
    • You may be able to add collision, comprehensive, and uninsured/underinsured motorist coverage with some insurers
  • Standard Policy: This is more similar to minimum coverage in other states. It includes:
    • Bodily injury liability in a minimum of $25,000 per person and $50,000 per accident (up to $250,000 per person and $500,000 per accident)
    • Property damage of $5,000 per accident
    • Personal injury protection in a minimum of $15,000 per person per accident, plus $250,000 in coverage for severe injuries such as permanent and significant brain injury, spinal cord damage, disfigurement, and more
    • You can add collision, comprehensive, and uninsured/underinsured motorist coverage

That was a lot of information, we know. But it’s important stuff. After all, it’s your finances at stake here. Now, bear with us, because there’s a little more to cover.

Free Car Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

Right to Sue in New Jersey

Here’s the kicker: you can choose a Standard policy, but then lower your premiums by voluntarily limiting your right to sue after an accident. It’s important that you explicitly make the choice when choosing your policy, or else your insurer will default you to a limited right to sue.

Let’s break down the difference:

  • Limited Right to Sue: With this option, you can still sue for damages after an accident, but only in certain cases. These include:
    • Loss of a body part
    • Significant disfigurement or scarring
    • A displaced fracture
    • Loss of a fetus
    • Permanent injury
    • Death
  • Unlimited Right to Sue: With this option, you’re able to sue for damages after an accident without restrictions, including minor but debilitating injuries. Even if an injury isn’t permanent, it can still cause you prolonged pain or prevent you from living your life to the fullest, and you may want the option to sue.

So, to recap: you can opt for a Basic policy and have a limited right to sue after an accident. Or, you can opt for a Standard policy and choose a limited right to sue or an unlimited right to sue. If you don’t explicitly choose, you’ll be given a limited right to sue by default.

Limiting your right to sue drastically cuts your premiums. By selecting the unlimited right to sue, your rates shoot up, and can even double in some cases.

The Average Cost of Car Insurance in New Jersey

There’s no getting around it: cost matters. Especially when it comes to something like insurance, which no one enjoys spending money on.

So, what’s the damage? Ringing in at slightly less than the national average, you can expect to pay the following average rates in New Jersey:

  • Full coverage averages $1,754 per year
  • Minimum coverage averages $782 per year

There are many factors that affect your actual rate, which we’ll explore next. But to give you an idea, here are the average rates for full coverage in major cities in the Garden State:

  • Lakewood: $1,916
  • Trenton: $1,770
  • Woodbridge: $1,885
  • Edison: $1,796
  • Toms River: $1,916

If the average rates have you sweating, don’t worry. Later, we’ll cover ways to save on car insurance so that your bank account stays healthy even after your insurance premium gets paid.

In the meantime, go ahead and get access to free quotes here to get a better idea of what you can expect to pay.

Free Car Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

How Your Car Insurance Rates Are Calculated in New Jersey

New Jersey loves to set itself apart. The state uses a process called auto insurance scoring to calculate your premiums. It combines information found in your credit report with typical insurance factors like your age, gender, vehicle, zip code, past insurance claims and accidents, and more.

This score essentially helps the insurer understand how likely you are to get into an accident, and what their risk is in insuring you. The good news is that insurers have to share the scoring model with you and with the New Jersey Department of Banking and Insurance. This is to help protect consumers.

How to Find Cheap Car Insurance in New Jersey

No gatekeeping here! We’re sharing our top tips for car insurance savings, because everyone deserves great coverage at affordable rates.

Here are the best ways to save on New Jersey auto insurance:

  • Get Multiple Quotes: You need at least three quotes from different insurers to figure out if you’re getting a good deal. You should also do this annually to make sure you’re not overpaying for car insurance.
  • Look at Discounts: Most insurers worth their salt offer discounts. Find out which ones you’re eligible for and stack as many as you can for the most savings. Typical discounts you will see include:
  • Bundle Car and Home Insurance: If you’re a homeowner, it might make sense to have your home and auto insurance with one provider as you’ll usually get a discount. Be sure to do the math though, in case it makes more sense to have them with separate providers.
  • Increase Your Deductible: By raising your deductible, your premiums will drop. It’s as simple as that. Read more here.
  • Review Your Coverage: In a perfect world, you’d have more coverage than you could possibly need, but that’s not realistic. Make sure you know exactly what you’re paying for and that you’re not paying for more coverage than you need. This could mean removing collision on an older vehicle, dropping your coverage limits if you’ve never submitted a claim, and more.
  • Maintain Coverage: If you won’t be driving regularly for a while, it’s tempting to cancel your auto insurance. But this could cost you: a lapse in coverage is a red flag to insurers and could lead to a jump in rates when you do take out a new policy. Find out more here.
  • Maintain a Clean Driving Record: This might seem obvious, but driving safely is the best thing you can do for your rates. Avoiding accidents and tickets will keep your rates down long term.
    • We all make mistakes. If you’ve racked up a few on your driving record, read this to find out how to get affordable car insurance.

Car insurance in New Jersey might cost less than the national average, but that’s no reason not to try to save money on your car insurance. These tips, although straightforward, can add up to as much as 30% savings on your auto insurance, and that’s nothing to sneeze at.

Free Car Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

Get New Jersey Car Insurance Quotes Now

If the Jersey shore is calling, it’s time to cut to the chase: your next step is getting car insurance quotes so that you can find the best policy for your needs. Start by collecting multiple quotes and comparing the insurers for cost, coverage, customer reviews, and more.

We’ll do you one better: click here for access to free quotes fast, because you have better things to do than look for car insurance all day. We’ve got you covered.


Stay Up-to-Date
Subscribe to our newsletter and receive alerts, offers, education, and updates in your inbox.