Learn how to navigate car insurance in the no-fault state of New Jersey.

 

With its high population density, New Jersey has some formidable traffic, both on parkways and on local streets. As a driver, you want to have the best New Jersey car insurance coverage to brave that traffic. At the same time, it needs to be affordable.

Today, we’ll dive into the New Jersey car insurance scene by looking at the best car insurance in New Jersey, state requirements, and the average cost of car insurance in the Garden State. We chose USAA as the best New Jersey car insurance provider. While it does have restrictions, its claims and customer service are hard to beat – and it offers some of the cheapest car insurance in N.J.

Whenever you shop for car insurance, we recommend getting quotes from multiple providers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.

Use our tool below or call (844) 246-8209 to start comparing personalized car insurance quotes:

 

In this article:

Who Has The Best New Jersey Car Insurance?

Finding the best car insurance in New Jersey requires looking at several factors. Sure, we all want to save money, but the cost can’t be the only factor. After all, you can go with the cheapest car insurance in New Jersey, but will your claims be paid promptly?

That’s why we evaluate car insurance coverage by various factors. After in-depth research, we found the five best options, based on coverage, average cost, reputation from industry experts, and additional benefits.

Here is our breakdown of the top car insurance providers in New Jersey. 

Best New Jersey Car Insurance Motor1 Rating Customer Service Affordability  Coverage

1. USAA Auto Insurance

5.0 5.0 4.5 4.5

2. Progressive Car Insurance

4.5 3.5 3.5 4.0

3. State Farm Insurance

4.5 3.5 4.0 4.0

4. NJM Auto Insurance

4.0 4.5 4.0 3.5

5. Geico Insurance

4.5 4.0 4.0 4.0

*You may notice that some car insurance companies are listed above those with higher star ratings. This is because our ratings take into account nationwide factors, while our ranking for this article looks specifically at what insurance providers are best for car insurance in New Jersey.

 


 

USAAInsurance logo

#1 Our First Choice For New Jersey Car Insurance: USAA

In our research of the top car insurance companies, USAA stood out for its price, customer service, and claims process. We named it best overall, and we think it also offers the best auto insurance rates for New Jersey. Here are a few things we like about USAA:

  • USAA has a superior financial rating of A++ from AM Best.
  • The company performed very well on J.D. Power’s Claims Satisfaction Study and Insurance Shopping Study.
  • USAA offers other perks like roadside assistance, rental car reimbursement, and accident forgiveness.

USAA is available to military members and candidates in commissioning programs. It’s also available to spouses and children of USAA members who have or have had auto or homeowners insurance. Once a military member signs up for a USAA policy, they can pass on eligibility to their children, grandchildren, and so on. 

Pros Cons
Affordable rates and numerous discounts Only available for military and their families
Good option for military members  
Superior financial strength rating and A- rating from the BBB  

To learn more about the car insurance provider, check out our USAA auto insurance review.

 


 

Progressive Insurance logo

#2 Runner-Up For Cheap Car Insurance In N.J.: Progressive

We also think Progressive is a great option for New Jersey car insurance. Progressive car insurance came in third place on our ranking of auto insurance companies overall, earning 4.5 out of 5.0 stars. Geico performed better in some areas, but we think Progressive offers better car insurance rates to drivers in New Jersey.

Progressive wrote $31 billion in premiums in 2019, according to the National Association of Insurance Commissioners (NAIC), and is the third-largest company for private car insurance. It has an A+ rating from AM Best, though it performed average on both of the J.D. Power studies mentioned above.

In addition to standard coverages, Progressive offers coverage options like roadside assistance, loan payoff, custom parts coverage, and insurance for rideshare drivers. The company has some decent car insurance discounts, too. You can lower your rate with the Snapshot app, and you can save $50 toward your deductible for each policy term you have without a claim.

Pros Cons
One of the top auto insurers in the United States Average claims process
Superior financial strength rating and A- rating from the BBB Mixed customer service reviews
Great choice for high-risk drivers Higher rates than some competitors
Several money-saving features and easy quotes process  

To learn more about the car insurance provider, check out our complete Progressive insurance reviewFor a full comparison of our top two New Jersey car insurance providers, read more in our review of USAA vs Progressive.

 


 

State Farm Insurance logo

#3 State Farm: Best For Students

State Farm is one of our top-recommended providers overall and an excellent choice for drivers in New Jersey. The company scored 855 out of 1,000 on the J.D. Power 2020 U.S. Auto Insurance Satisfaction StudySM, ranking first in the Mid-Atlantic region.

In addition to providing superior coverage, State Farm offers useful benefits such as rideshare coverage, roadside assistance, rental coverage, and travel expense coverage. There are several ways customers can reduce their premiums with State Farm, including:

  • Safe driving discount
  • Safe vehicle discount
  • Multiple vehicle discount
  • Multiple policy discount

High industry ratings, a reputation for fast claims servicing, and the implementation of modern tools like the Drive Safe & SaveTM app make State Farm easy to recommend.

Pros Cons
Largest auto insurer in the country, available in 48 states Reported errors with autopay
Many discounts for teens and students Higher rates than some competitors
Positive customer reviews Not taking new customers in Massachusetts or Rhode Island
Easy online quotes process  
Superior financial strength rating and A+ rating from the BBB  

To learn more about State Farm, check out our State Farm insurance review.

 


 

NJM Insurance logo

#4 NJM Insurance Company: Best Local Agents

New Jersey Manufacturers Insurance is a local provider offered only in Connecticut, New Jersey, and Pennsylvania. Because of this, the company is able to specialize in the New Jersey market, providing local agents familiar with the needs of New Jersey drivers.

NJM customers may find some of the lowest New Jersey car insurance rates paired with excellent service. The company scored 847 out of 1,000 on the J.D. Power 2020 U.S. Auto Insurance Satisfaction StudySM, placing third for the Mid-Atlantic region.

Discounts opportunities for NJM customers include:

  • Multiple policy discount
  • Multiple vehicle discount
  • Paying your premium in full
  • Having safety features installed in your car
  • Good student discount
  • Completing a defensive driving course
Pros Cons
Strong financial standing

Limited scope of policies and coverage

Local agents

 

Competitive rates

 

Good customer service

 

To learn more about the car insurance provider, read our in-depth NJM auto insurance review.

 


 

Geico Insurance logo

#5 Geico: Best Overall In The Nation

While Geico may not be the cheapest option for New Jersey drivers, the company is our top recommended provider nationwide. Geico is the second largest car insurance company in the U.S. for a reason, offering comprehensive coverage at a low cost. The discount opportunities are vast, and include:

  • Good student discount
  • Good driver discount
  • Defensive driver discount
  • Discounts for airbags, anti-lock brakes, and anti-theft devices
  • Multiple policy discount
  • Multiple vehicle discount
  • Military discount
  • Federal employee discount

Geico writes tens of billions of dollars in premiums every year and has an A++ AM Best financial strength rating (the highest rating possible). In addition to its high industry standing, Geico receives top marks from satisfied customers.

Pros Cons
Superior financial strength rating and A+ rating from the BBB Average quotes experience
Many choices for coverage Usage-based app not available in all states
High level of customer satisfaction  
Available in 50 states  

If you want to read more about the provider, see our full Geico review.

Enter your zip code in the tool below to collect and compare car insurance quotes from providers available in your state to find cheap auto insurance. For an even easier process, call our team at (844) 246-8209.

 

 

New Jersey Is A No-Fault State

Before we get into the details, we need to let you know that New Jersey is a no-fault state. That means drivers seek compensation for medical bills from their own insurance companies, regardless of who is at fault in an car accident. It also means that a driver can file a first-party claim with their own insurance company to cover property damages or file a third-party claim with the at-fault driver.

While most states have insurance requirements, no-fault state requirements are usually different from what at-fault states require. These requirements are also called financial responsibility laws. Many states give you the option to forego insurance if you can prove that you have the means to cover repayment after causing an auto accident. If you cause an accident without insurance and can’t cover the cost, your license and registration may be revoked or suspended. Many states will also require you to file an SR-22 form, which verifies that you will carry insurance for the next three years.

 


 

What Are New Jersey's Car Insurance Requirements?

New Jersey car insurance requirements are a bit different from other states, so we’re going to cover the basic coverage definitions first:

  • Bodily injury liability (BI): Covers medical bills and lost wages for other people in accidents that you cause
  • Property damage liability (PD): Covers damage to other vehicles and property in accidents you cause
  • Personal injury protection (PIP): Covers your medical bills, lost wages, and death benefits no matter who was at fault
  • Uninsured/Underinsured motorist: Covers damage to your car and medical bills for you and your passengers when you get hit by an uninsured or underinsured driver
  • Collision coverage: Covers damage to your vehicle from an accident, whether you were at fault or not
  • Comprehensive car insurance: Covers damage from events not related to a collision, like fire, hail, flooding, or vandalism

You actually have two options to satisfy minimum coverage amounts for New Jersey auto insurance. The bare minimum is called the Basic Policy, and it is best for people with few assets and minimal family responsibilities. While you technically satisfy minimum requirements with a Basic Policy, New Jersey recommends that you purchase at least a Standard Policy if you are able to. Here’s what the Basic and Standard Policies look like:

Coverage Type Standard Policy Minimum Basic Policy Minimum
Bodily injury liability $15,000 per person, $30,000 per accident No minimum, but $10,000 per person and accident is available as an option
Property damage liability $5,000 per accident $5,000 per accident
Personal injury protection  $15,000 per person and accident $15,000 per person and accident
Uninsured/Underinsured Motorist No minimum Not available as an option
Collision coverage No minimum No minimum
Comprehensive car insurance No minimum No minimum
 

Personal Injury Protection in New Jersey also covers up to $250,000 for certain injuries, regardless of the chosen policy limit. This extended limit covers significant injuries like permanent brain damage, spinal cord injury, and disfigurement.

You can see that the main difference between a Standard Policy and Basic Policy is found in the first box – bodily injury liability. While everyone is required to carry PIP to cover their own medical expenses, $15,000 is not much to work with. The extra liability insurance under the Standard Policy can come in handy when you cause a serious car accident.

New Jersey car insurance plans also allow drivers to purchase up to $250,000 in PIP coverage. PIP benefits require a $750 deductible, and raising or lowering that deductible will change the total cost of your PIP premium. You can also reduce the cost by naming your primary healthcare provider as your PIP provider.

Finally, each time you file a PIP claim in New Jersey, you’ll also have to make a copayment. The copay amount is 20 percent of the difference between your deductible and $5,000. If that sounds like a headache, it is. For example, let’s pretend you have a $1,000 deductible. You get into an car accident and need to file a PIP claim that’s within your coverage limits. First, you’ll pay your $1,000 deductible. Then, you’ll pay a copay that’s 20 percent of $4,000, which is $800. Just for fun, here’s what your PIP expenses would be for different deductible amounts:

PIP Deductible PIP Copay Total Out-Of-Pocket
$250 $950 $1,200
$500

$900

$1,400
$750 $850 $1,600
$1,000 $800 $1,800
 

While the copay does decrease with a higher deductible, your overall out-of-pocket costs are higher with higher deductibles.

 


 

New Jersey Right To Sue

There’s another difference worth mentioning between the Standard Policy and the Basic Policy. Under the Standard Policy, drivers have the Unlimited Right to Sue for both economic loss and pain and suffering. Drivers with a Basic Policy can still sue for economic loss (lost wages and medical bills), but they can only sue for pain and suffering if they experienced a permanent injury.

 


 

What Is The Average Cost Of New Jersey Car Insurance?

Compared to the national average, car insurance in New Jersey is expensive. In fact, it is the fourth most expensive state in respect to car insurance, coming in only behind Louisiana, Michigan, and Florida. This is probably due to the fact that New Jersey has the highest population density out of the 50 states.

According to the NAIC, the cost of New Jersey car insurance was $1,350.28 in 2017, while the national average was $1,004.68. Here’s a breakdown of the coverage costs that year based on data from the Insurance Information Institute:

Type of Coverage Average Annual Expenditure in 2017
Liability coverage $932.43
Collision coverage $403.19
Comprehensive coverage $129.12
Total cost $1,350.28
 

*Most drivers carry liability coverage but not necessarily other types of auto insurance. Total average annual expenditure measures what New Jersey drivers actually spent on auto insurance in 2017.

How Is The Cost Of Car Insurance Determined?

Just as in every state, New Jersey car insurance quotes are influenced by many things, such as:

  • Your zip code in N.J.
  • Age, gender, and marital status
  • Driving record
  • Years of experience 
  • Credit score
  • Recent claims
  • Type of car you drive and how you drive it

If you find an N.J. car insurance quote that’s below the state average, we’d say that’s a good deal. However, make sure you know exactly what the policy covers, so you aren’t caught off guard later on.

N.J. Auto Insurance Cost Change Over Time

Another thing to know is that the New Jersey car insurance market is never stagnant. Prices can fluctuate over time, and many other states have seen huge growth in premiums over the past 10 years. However, as a New Jersey car insurance policyholder, you’re lucky. The State of Insurance report found that N.J. auto insurance prices only rose 3.28 percent between 2011 and 2018. In contrast, 17 other states experienced increases of 40 percent or more. Ouch.

How To Lower Your New Jersey Car Insurance

The quickest way to lower your own insurance costs without switching companies is to increase your deductible. You can lower your yearly premium by about $200 by increasing a $500 deductible to $1,000. However, make sure you’d be able to pay your deductible if you had to. You might be a great driver, but many other drivers on the road are not.

You might also consider downgrading your coverage, though that’s a risky game. First of all, if you financed your car, your lender requires you to have a certain amount of coverage. That coverage is probably more than the state minimum, and many lenders require you to have collision and comprehensive coverage. Also, do you want to risk a lawsuit? Other drivers can sue you if your policy doesn’t cover all of the damages from an auto accident.

If you're considering changing your insurance to lower the price, use the tool below or call (844) 246-8209 to compare several insurance providers at once:

 

 


 

New Jersey Driving Statistics

The state of New Jersey has almost 39,000 miles of public roads, and its drivers traveled over 77.5 billion miles total in 2018. The state also has about 6.3 million licensed drivers, and there were 278,413 reported crashes in 2018. If we assume that an auto accident involves two drivers, New Jersey drivers had a 10 percent chance of getting into an accident during the year. Looked at another way, the average driver would experience an accident at least once every 10 years. That might not sound very often, but you never know if an accident will happen today or five years from now.

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