I’ve got bad news and I’ve got good news. New Jersey’s high population density and no-fault system drives monthly auto insurance premiums above the national average — that’s the bad news. The good news is with a little bit of research, you can find the policy that’s right for you and save hundreds in the process.

I got quotes for New Jersey’s minimum coverage with five different companies and found that prices varied as much as $626. Progressive was the best option for cheap car insurance option for me (and my driving record), but it might be a different story for you. Quotes are highly personalized, so it’s impossible to say one company is the absolute best for everyone.

Insurance rates are based on algorithms that calculate your individual risk as a driver. That risk profile includes driving specific data like the make and model of your car and your driving record, but it also includes personal factors that are less directly related to your driving record, including your age, your credit score, and your zip code. Even if you know the risk factors that you’re triggering, it’s not easy to predict which company will be the cheapest; every insurance company uses its own formula that weights those factors differently. The only way to find the best company for your particular scenario is to get at least five quotes and compare them.

Really, getting a quote isn’t as big of a fuss as it’s often made out to be. Most of the national companies let you get an online quote in less than five minutes, but if you have to call for a quote, know it’ll add 10 to 15 minutes to the process. If you don’t know your annual mileage or the details of any accidents you’ve had in the last five years, look that up before getting started. Otherwise, it’s as simple as clicking a few buttons and checking some boxes. Personally, I put on a podcast and by the time it was over, I’d already finished getting my quotes.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.

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

I began my search with five companies I picked for their top-shelf customer service and financial ratings. These factors are incredibly important because they speak to each company’s ability to actually pay out on claims and handle them swiftly and effectively. Who wants to be stuck in a squabble with their provider in the heat of an accident?

Insurer My quote
Progressive $1,078
Geico $1,108
Travelers $1,560
State Farm $1,580
Allstate $1,704

Specifically, I required an “excellent” or “superior” financial stability grade from A.M. Best, a top financial strength rating agency, and high customer satisfaction ratings from J.D. Power, a global leader in customer satisfaction surveys.

Of the five quotes, Progressive was my best car insurance option. At $1,078 a year, it’s nearly $30 less than my next-best policy. Even that second-best rate from Geico is a steal compared to the $1,704 Allstate wanted to charge me. With such a difference in price, I can purchase significantly higher coverage from Progressive and still pay less than Allstate’s rate for minimum coverage. In my opinion, it’s definitely worth investing in better coverage before paying more for the exact same plan.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Auto insurers don’t just care about risk when calculating rates anymore; they also consider how likely you are to leave them for another company. They’ve got big data, that includes information on your online shopping habits, how long you’ve been with your cellular carrier, and even your social media activity, on their side. And they’re using it not only to determine your individual risk (or how much they’re likely to pay out on your behalf), they’re gauging the likelihood that you’ll apply for quotes somewhere else. That’s what they call the “price elasticity of demand.” In other words, it’s how willing you’d be able to stretch and pay more. They use the data to charge you as much as they think you’re willing to pay — a process called price optimization. If they don’t expect you to shop for a better deal, they’ll sneak a few extra dollars into your monthly premiums. Loyal customers are likely not getting rewarded for their loyalty; they’re often taken advantage of because they’re less risky to dabble with than people who frequently apply for quotes.

Insurance companies want to maximize their profits, but they also want to keep your business. So if they fear you’re going to move to a competitor, they won’t take the chance of hiking your rates. It’s smart to shop around at least every year or two, if only because it prevents you from being marked as someone willing to pay a higher rate.

More than a dozen states have outlawed price optimization, saying that the use of non-risk related data in ratemaking results in unfair discrimination. However, New Jersey hasn’t yet followed suit. For now, it’s up to you to make sure you’re not being charged more than necessary simply because your company has data to show you’re not averse to a price increase.

New Jersey’s Minimum Coverage

The Bare Minimum

New Jersey structures its auto insurance policies differently than most other states. Residents have a choice between a Basic or Standard policy. The Basic policy is cheaper, but provides limited coverage. You must have at least $15,000 of personal injury protection, with a limit of $250,000 for serious injuries, and $5,000 of property damage liability coverage.

The Standard policy requires bodily injury liability coverage of $15,000 per person and $30,000 per accident, $5,000 of property damage liability coverage. It also requires uninsured motorist coverage of $15,000 per person and $30,000 per accident as well as personal injury protection in the same quantities required by the Basic policy. If you chose a Basic policy, it’s likely to be cheaper, but it also requires that you relinquish your unlimited right to sue if you’re involved in an accident; you’ll be able to sue for medical bills and lost income, but you’ll only be able to sue for pain and suffering in cases of particular and severe injuries.

New Jersey also offers a Special Auto Insurance Policy (SAIP) for individuals who are eligible for Federal Medicaid with hospitalization. This is a limited policy that costs only $365 a year, but only covers only medical expenses that result from a car accident. It doesn’t cover damages to any property involved in the accident — your car or the other driver’s car.

The Best Car Insurance Isn’t Just Cheap Car Insurance

The state minimums are so low that I recommend purchasing a higher coverage limit if you can reasonably afford it.

Here’s why:

The average cost of a disabling, nonfatal injury is $90,000.

If you get into a serious accident and you only have the minimum coverage, you’ll still be left with a hefty bill after your insurance has paid its portion. You’ll likely be sued for the rest and end up emptying your bank account to pay for the damages. That’s a scenario no one wants to end up in, so it’s better to go with higher coverage limits if you can.

If You Skip Coverage, It’ll Cost You

New Jersey is tough on uninsured drivers and if you get caught, you’ll wish you’d just paid the premiums. A first offense will earn you a fine of somewhere between $300 and $1,000, suspension of your driver’s license for one year. You’ll also be sentenced to some period of community service, as determined by the court. Repeat offenders can face up to $5,000 in fines, a two-year suspension of their license, 30 days of community service, and 14 days in jail. The Basic policy was introduced to make it more affordable to get enough coverage to be legal.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.


Why are New Jersey’s rates the way they are?

New Jersey’s auto insurance premiums are 23 percent above the national average, partly because it has the highest population density of any state in the country. This means more people living in closer quarters, and to insurers, that translates to a greater risk of accidents.

One study also found New Jersey to be one of the most expensive states for auto repair. In the event of a claim, insurers are going to have to pay more in New Jersey than they would for a similar claim in a less expensive state. The insurance companies pass that extra expense along to drivers in the form of higher monthly premiums.

New Jersey’s no-fault auto insurance system also contributes to the high rates. Under this system, claims are handled by your own insurance, regardless of who was at fault in an accident. This approach was intended to reduce auto insurance premiums, although in practice, rates in no-fault states are higher than in tort states.

Only 12 states in the nation have no-fault systems and only three — including New Jersey — have choice no-fault systems, enabling consumers to choose if they want that coverage or the more traditional tort insurance. The limited tort (no-fault) option is cheaper, but it also limits your ability to sue for damages. You always retain the ability to sue for medical bills or lost income, but you give up your right to pursue damages for pain and suffering. The full tort option enables you to retain that right, but only you can decide if that’s worth paying extra on your monthly premiums.

Your Rights in New Jersey

  • Agents, brokers and companies must inform you of your coverage options when applying for a new policy, or at any time upon your request if you are already insured.
  • You have the right to know how each choice may affect what you pay and what your benefits would be in the event of an accident.
  • You always have the right to ask about additional options.
  • You can shop for auto insurance at any time — not just when your policy is up for renewal, and if you find a better price, you can cancel your old policy and seek a refund of your unused premium.
  • You have the right to change your coverages and policy limits at any time, even if you are not near your renewal date. If you select options that save you money, you have a right to a refund of your unused premium within 60 days.

The Bottom Line

No one company provides the best car insurance for everyone. It’s a fact. The only way to find the right fit for you is to get quotes and compare their prices and coverages. I know it sounds like a lot of legwork, but it doesn’t have to be. I found over $600 in savings and thanks to a little bit of preparation, it took less than 30 minutes.

Car Insurance in New Jersey

  • Progressive
  • Geico
  • Travelers
  • State Farm
  • Allstate

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.