Cheap Car Insurance in New Jersey for 2020

  • John Goreham
  • 7/17/2020

New Jersey is an expensive state for car insurance with an average premium around $1,565 per year. We researched the cheapest insurers in New Jersey to see how you can save.

Who has the cheapest car insurance in New Jersey?

  • GEICO
  • New Jersey Manufacturers (NJM)
  • Travelers
  • State Farm
  • Progressive

We sampled information from a number of sources and developed a range of what cheap car insurance usually costs per year in New jersey. We based these samples on a driver with at least a decade of driving experience, a clean driving record, driving one of America’s most popular, non-exotic vehicles.

The important thing to remember is that insurance rates can vary widely, and prices can change almost daily. This range is only a GUIDE to give you a basic idea about the rates insurance companies charge today in New Jersey.

DISCLAIMER: There are numerous other factors that are going to impact the cost of insurance on your car, crossover, or truck. We’ll provide info on some of those variables, but your best bet is to read our deep dive on Cheap Car Insurance for 2020 to get a better idea.

Who has the best cheap car insurance in New Jersey?

  • Best Large Insurance Carrier - In New Jersey, our data shows that it is GEICO. Cutting out agents has an impact on your premium.

  • Cheapest Insurance with Bad Credit - NJM has the lead here for folks who view due dates as a suggestion.

  • Cheapest Insurance with One Accident - NJM is also the cheapest when you have wrinkled the fenders.

  • Cheapest Insurance for Higher Mileage - NJM again. Like many states, the local company seems to be best when you have a situation that points to higher premiums.

How much does car insurance cost in New Jersey?

In Car Talk’s deep dive on affordable car insurance, we found that a national average for auto insurance was $1,341. In New Jersey, depending on what city and county you live in, you’re probably going to be paying up to 15% more. Our prior research also revealed that the overall average is about $1,565 for insurance in New Jersey.

Rates we found reported as “typical” or “average” (annual) onlineAverage (annual)Adjusted average* (annual)
GEICO$705, $976,$1,339,$1,353,$1,453$1,165$1,223
New Jersey Manufacturers (NJM)$1,301,$1,312,$1,558$1,390$1,390
Travellers$1,168,$1,346,$1,7153$1,410$1,410
State Farm$1,427,$1,631,$2,119$1,726$1,726
Progressive$1,147,$1,760,$2,003,$2,557$1,867$1,882

(*) The “adjusted average” is computed by eliminating the highest and lowest values and averaging the remaining values.

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What causes rates to go up in New Jersey?

Let’s start by asking, “Why is insurance expensive in New Jersey to begin with.” There are some factual answers. To begin with, New Jersey is an urban area with mainly a high population density. That always adds cost to insurance. New Jersey is also located in a very busy corridor for traffic. That congestion only adds to the risk of a crash, and thus raises rates. Finally, New Jersey is not the hurricane magnet that Florida is, but it has had its share of recent disasters that added cost to auto premiums.

Insurers also say that New Jersey’s way of handling personal injury and protection (PIP) is unusually expensive. The default is $250K. Some drivers can carry less, but few opt to do so. That drives up the average. However, only in comparison to states that allow for lower protection.

Helping New Jersey’s costs is a low ranking for drunk driving deaths. In fact, New Jersey is one of the lowest states for drunk driving deaths per population. Perhaps drivers in New Jersey know that one DUI can more than double your insurance costs.

How do accidents affect rates in New Jersey?

Crashing your car means you win the bet. You just beat your insurer who was betting that you would not crash. Congratulations! Now pay up going forward. The house always wins. If you trade paint with another motorist, your insurance rate is going to go up. Exactly how much is known only to the insurer you have. New Jersey is one of the majority states that uses a “no-fault” system. That actually helps reduce costs overall. But not much.

Here are the best estimates we could find from various sources on how much one accident will raise your policy premium in New Jersey:

Range of Rate Increases for One AccidentAverage of Rate IncreasesAdjusted Average of Rate Increases
20%, 20%, 32%, 59%33%26%

This information is just an approximation. Many factors can change how much your insurance goes up after you have one accident. For example, if you’ve paid more in your annual insurance cost to be a part of an accident forgiveness program, your increase for one accident is nothing, but your overall cost of insurance is higher every year than if you hadn’t. Almost all of the insurers on our list above of cheap insurance providers, and many others, offer this option which was popularized by Allstate.

How do traffic tickets affect rates in New Jersey?

Breaking the law gives your insurer an excuse to raise rates. One they are not going to pass up. How much the sting will be varies based on the type of ticket and the severity of the offense.

Here is the data we could dig up on the percent increase range a ticket will raise your car insurance policy premium in New Jersey:

Range of Rate Increases for One Speeding ViolationAverage of Rate IncreasesAdjusted Average of Rate Increases
11%, 20%, 34%22%22%

How can you get car insurance discounts in New Jersey?

The most significant discount you can realize in New Jersey is to move to a location with lower rates. Even just being outside of the downtown area can help. Move to a county with lower claim rates and you may save as much as 20% per year. We looked at the comparative costs of insurance by county and found that those living in Hudson County pay about 20% more than those living in Union or Morris. But moving comes with a lifestyle change many are not willing to make.

The easier way to manage your insurance costs is to avoid having accidents and getting speeding tickets. And your car and phone apps can help. Avoiding accidents has gotten easier in recent years as vehicles with adaptive cruise control and automatic emergency braking systems have come to market, even in affordable vehicles like the Hyundai Elantra and Toyota Camry. Ironically, insurers don’t discount cars with those systems yet because they cost a lot to repair (so they say…)

Avoiding speeding tickets in New Jersey is harder than in some states. The speed limit in Texas on a lonely state highway is as much as 35 MPH higher than in New Jersey. However, apps like Google Maps Waze to help you know where the speed traps are and warn you to slow down.

We also have an entire story on the tens of thousands of discount programs available, based on memberships, military service, and other associations. Some of the more common meaningful discounts relate to low mileage driving, bundling with your home owner’s policy, and carrying high deductibles. Students take note: Many insurers will offer good students a discount. Parents take note: If your kid is at college more than 100 miles away you may see big savings.

What’s the minimum coverage allowed in New Jersey?

Insurance is required by law in New Jersey. To drive in New Jersey, you must have at least $15,000 in liability coverage for each injured person, up to a total of $30,000 per accident, and $5,000 for property damage per accident. This basic coverage is called 15/5/30. Almost no homeowner with any assets will buy just the basic coverage required by law. More typical is coverage on the order of 100/300/50. It seems unfair, but that’s the way it works.

Nearly every state’s minimum is way too low. If you have a vehicle loan or lease, or own a home, you will find that you are required to carry higher levels of coverage to satisfy other agreements and responsibilities you have. Our focus in this story is on cheap car insurance. However, for a full list of all the coverage you may want to buy, check out the New Jersey Department of Banking and Insurance’s page on coverage. It helps explain the difference between basic, standard, and optional coverage.

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FAQ

Who has the cheapest car insurance in New Jersey?

Insurance rates vary greatly between carriers and even between policyholders. Our research showed that GEICO and NJM have the best rates. If you fall into any of the categories that bump up rates, you may be better off with NJM.

How can I get super cheap car insurance?

There’s no tried-and-true rule for getting cheap car insurance. The best rates available to you will depend on where you live, your driving record, the coverage you need, the type of vehicle you own, and other factors like your credit score. Also, make the carrier aware of other memberships or special circumstances you have. If you’re a veteran, active military, senior citizen, or if you have a membership to an organization like AAA or AARP, you may be eligible for discounted or special rates.

What is the cheapest online car insurance?

Years ago, only a few companies offered online applications for their insurance policies, but that has changed in recent years. Almost all insurance carriers offer an online-only option to apply for coverage now, so it’s just a matter of shopping around. Data reported on multiple sources shows that USAA is still one of the most affordable options, but well-known insurance carriers State Farm aren’t far behind for many people.

What’s important in a car insurance company besides the rates?

Unsurprisingly, some car insurers have been called out by their customers for having poor customer service and in some cases unexpected rate changes. We recommend checking recent online reviews before you switch to a new carrier.

Does credit score affect car insurance?

Unfortunately, yes. The Federal Trade Commission found that low credit scores were relatively accurate predictors of a driver’s risk for an accident. As a result, insurance companies will sometimes charge higher rates and have more restrictive coverage offerings for people with spotty credit histories. New Jersey is one of the 40 states that allow your credit score to impact your annual insurance cost.

Is there low income car insurance?

Yes, there is. It is linked to those who rely on Medicaid and is called Special Automobile Insurance Policy (SAIP). You can learn more about this ultra-low cost policy at the states information page.

Who has the cheapest full coverage?

Full coverage costs vary by carrier. GEICO, NJM, and Travelers are all among the cheapest full coverage providers in New Jersey.

What do you do if you can’t afford car insurance?

New Jersey requires insurance by law. If you are unable to afford any coverage, the best option will be finding alternative transportation like Uber and Lyft.

Can I buy one day car insurance?

One day insurance can be very helpful if you’re buying a car or moving a vehicle from one location or another. You can also buy temporary coverage and supplemental coverage for special activities like track days and off-roading.

How can I get my insurance quote cheaper?

Shopping around is the best strategy to find the best rates. Companies will often compete with each other for your business. You can also take advantage of any other memberships you might have, like AAA or AARP for discounts.

Can you lie about your job on car insurance?

No. Lying about any part of your insurance application can result in lost coverage, uncovered accidents, or legal action.

Why is my insurance so high with no accidents?

The short answer is “Because you live in New Jersey.” Beyond that, your age, marital status, the city or town you live in, your credit score, and your driving record all have an influence.

Is an older car cheaper to insure?

An older car is not always cheaper to insure. Insurance companies use complex algorithms with many factors to set a price. The value of the vehicle does matter.

What happens to car insurance after a speeding ticket?

It goes up. A lot. On the order of 22% for minor offenses and it can more than double for DUI convictions. The insurance increases will likely be much more of a financial hit than the actual traffic fine.

Why does car insurance cost so much?

Car insurance becomes expensive for people with spotty driving records, poor credit, or for those that live in extremely congested areas with other people that get into lots of accidents. Insurance is a numbers game, and companies are constantly trying to adjust their rates to match their perceived level of risk.

Editor's note and disclaimer: Car Talk is supported by our fans, readers and listeners. When you click on some of the links on our website, we may receive referral compensation. However, you should know that the recommendations we make are based on our independent editorial review and analyses.