INSURANCE - CAR INSURANCE

Average Cost of Car Insurance in New Jersey for 2024

Updated Sept. 20, 2023
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Palisades is generally the cheapest car insurance in New Jersey for both full coverage and minimum liability policies.

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New Jersey can be a fantastic place to live. It’s a short distance to major cities like New York and Philadelphia, has numerous beaches and casinos, and is well-known for its multitude of diners. The downside? New Jersey can be expensive. 

It has a higher cost of living than most states, which means its car insurance premiums are also more expensive. The average cost of car insurance in New Jersey is $2,080, compared to the national average of $1,582. Learn more about how much car insurance in New Jersey costs and what you can do to lower your premiums. 

In this article

Key takeaways

  • The average cost of car insurance in New Jersey is $2,080 per year.

  • In New Jersey, you could save up to 10% for three years on your premiums by completing a defensive driving course. 

  • Young drivers pay an average of $4,503 per year for coverage.

How much does car insurance cost in New Jersey?

It’s no surprise that car insurance is pricey, but it’s especially expensive in New Jersey. Not only does New Jersey have a higher cost of living, but it also has a high incidence rate for accidents. In fact, according to the New Jersey Department of Transportation, there are over 275,000 accidents every year.

Combined, those factors drive up car insurance premiums. The average cost of full coverage insurance is $2,080 per year. For state-minimum coverage, the average price is $941 per year.

Avg. cost for full coverage Avg. cost for minimum coverage Cheapest insurance provider
$2,080/year $941/year Palisades
Avg. for young drivers Avg. cost for seniors Avg. for high-risk drivers
$4,503/year $2,000/year $2,684/year

Average cost of car insurance in New Jersey by provider

Many companies are licensed to issue car insurance policies in New Jersey. Companies like Allstate and State Farm are well-known companies that have customers nationwide. But New Jersey also has smaller insurers, such as Plymouth Rock, that serve specific states.

Shopping around is a smart way to save money on your policy. Of the six companies seen below, we found that Geico had the lowest average premiums for both full coverage and minimum liability coverage. By contrast, Farmers Insurance was the most expensive. Farmers’ average premiums were more than double Geico’s rates.

Provider Full coverage Minimum liability coverage
Allstate
$1,903/year
$903/year
Farmers $2,508/year
$1,560/year
GEICO $1,175/year
$514/year
State Farm
$1,700/year $1,032/year
Progressive $2,269/year $1,178/year
Plymouth Rock $1,932/year $804/year

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How does credit score affect car insurance rates in New Jersey?

Unlike some states, New Jersey doesn’t restrict insurance companies from using customer credit scores. Insurers can use your credit history and credit scores to determine your premiums. Generally, the better your credit, the lower your premiums will be.

The average premium for someone with poor credit is $3,894. Someone with excellent credit, meaning a score of 750 or higher, pays just $1,749 for the same coverage — less than half the cost.

Credit health Avg. annual premium
Poor (550-649) $3,894/year
Average (650-699) $2,845/year
Good (700-749) $2,214/year
Excellent (750+) $1,749/year

Average car insurance rates for high-risk drivers in New Jersey

As mentioned above, accidents in New Jersey are common. Accidents, speeding tickets, and driving under the influence (DUI) convictions will cost you. A single accident can cause your annual premiums to increase by $1,051.

Violation Avg. annual premium before violation* Avg. annual premium after violation Avg. cost increase
At-fault accident $2,080/year $3,131/year $1,051
DUI $2,080/year $3,257/year $1,177
Speeding ticket $2,080/year $2,540/year $460

*Assumes clean driving record with good credit

How does age affect car insurance rates in New Jersey?

For older drivers, there’s good news: rates for those 60 years of age are cheaper than for younger groups. On average, people who are 60 pay $1,946 per year.

That number is dramatically lower than what a teenager would pay — the average premium for an 18-year-old is a whopping $4,874.

Age Avg. annual premium
18 $4,874/year
25 $1,967/year
30 $2,067/year
40 $2,108/year
60 $1,946/year

New Jersey car insurance rates by city

Insurance companies look at several factors when reviewing your information and calculating your premiums. One of the most significant factors is your location. For example, if you live in a busy city with a high rate of crime or accidents, you’ll pay more than someone who lives in a quiet suburb.

For example, Union City is one of the most densely populated cities in the country. It also has a high crime rate; NeighborhoodScout issued Union City a crime index of 24, meaning it’s safer than just 24% of the cities in the country. 

Thanks to those factors, residents in Union City can expect to pay much higher premiums than those who live elsewhere. The average premium for Union City is $3,107.

City Avg. annual full-coverage premium
Elizabeth $2,886/year
Jersey City $2,492/year
Newark $2,993/year
Paterson $2,975/year
Union City $3,107/year
Woodbridge $2,550/year

NJ’s minimum car insurance requirements

Most states require drivers to have liability coverage, and New Jersey is no exception. In New Jersey, your insurance policy must meet the following minimum requirements:

  • $5,000 in property damage liability coverage per accident
  • $15,000 in personal injury protection per person, per accident (up to $250,000 for certain injuries, such as significant brain or spinal cord injuries)

How to save money on car insurance in New Jersey

If your auto insurance premiums are too expensive, you may be able to lower the cost with the following tips:

  • Increase your deductible: The lower your deductible is — how much you have to pay for injuries or damages before your insurance pays — the higher your premiums will be. You can reduce your premiums by increasing your deductible.
  • Ask your agent about discounts: You may be eligible for discounts on an existing policy. For example, you may qualify for a multi-policy discount if you have homeowners or renters insurance, or you may qualify for a good student discount if you’re in school.
  • Complete a defensive driving course: By completing an approved defensive driving course, you could reduce your premiums by as much as 10%.
  • Get quotes from other companies: It’s wise to request quotes from several insurers at least once a year. You may be surprised by how much prices can vary between companies. If you aren’t sure where to start, check out our picks for the best car insurance companies.
  • Consider New Jersey’s Special Automobile Insurance Policy (SAIP): Some New Jersey residents who struggle to afford their premiums qualify for SAIP. The program provides limited coverage to low-income drivers eligible for federal Medicaid with hospitalization. Qualifying drivers can get coverage for just $365 per year.

Methodology

Our analysis was conducted using six different auto insurance marketplaces to determine the average cost of auto insurance in each state. The data we analyzed included coverage premiums from up to 10 different insurance providers. We looked at rates by city, driver profile, and credit score, as well as factored in the impact of driving violations. This data is for comparative purposes only. Your actual quote may be different.

FAQs about car insurance costs in NJ

Is car insurance expensive in NJ?

Yes. The average yearly premium in New Jersey is $2,080, compared to the national average of $1,582.

How much is car insurance per year in NJ?

The average premium for full coverage insurance, which includes liability, collision, and comprehensive protection, is $2,080 per year. 

If you choose to purchase state-minimum coverage, the average cost is $941 per year. 

  • You could save up to $500 with some companies
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Author Details

Kat Tretina Kat Tretina is a personal finance expert focusing on practical financial matters, including student loans, debt repayment, side hustles, insurance, and healthcare. Drawing from her personal experience, she aims to simplify complex financial topics and provide individuals with the information they need to make informed decisions.