Find New Jersey’s car insurance cost for both new and used cars. Also see what coverage you need, how your car’s value and credit score affect your rate, and where you can cut costs without leaving yourself in trouble.
New Jersey drivers pay 15-87% more for car insurance than the national average, depending on coverage level. Full coverage runs $2,160-$3,450 per year, while minimum coverage averages $1,285-$2,754 annually.
Curious about car financing? See real New Jersey car loan rates shared by our community.
Basic vs. Standard Policy
New Jersey offers two distinct policy types. Your choice affects not just your premium, but your right to sue after an accident.
The Basic Policy
The Basic Policy is the cheapest way to meet New Jersey’s legal requirements. It includes:
- Property Damage Liability: $5,000 per accident.
- Personal Injury Protection (PIP): $15,000 per person, per accident. Up to $250,000 for severe injuries like permanent brain damage or spinal cord injuries.
- Optional Bodily Injury Liability: $10,000 per accident (not included by default).
- No Uninsured Motorist Coverage.
With a Basic Policy, you have a limited right to sue. You can only sue for pain and suffering if you suffer certain permanent injuries — broken bones, significant disfigurement, or death.
MFP Tip: The Basic Policy is designed for drivers with very few assets to protect. The $5,000 property damage limit won’t cover most fender-benders with newer vehicles — if you cause more damage than your coverage, you pay the difference out of pocket.
The Standard Policy
The Standard Policy is what most New Jersey drivers choose. Current minimums (2025):
- Bodily Injury Liability: $25,000 per person / $50,000 per accident.
- Property Damage Liability: $25,000 per accident.
- Personal Injury Protection (PIP): $15,000 per person (can increase up to $250,000).
- Uninsured/Underinsured Motorist Coverage: $25,000 per person / $50,000 per accident (standard policies require UM coverage).
January 2026 Update: Minimums increase to 35/70/25 — $35,000 per person, $70,000 per accident for bodily injury, and $25,000 for property damage. Your insurer will automatically update your policy at renewal.
With a Standard Policy, you choose between Limited Right to Sue (lower premium, restricted lawsuit rights) or Unlimited Right to Sue (higher premium, full lawsuit rights for pain and suffering regardless of injury severity).
New Jersey New Car Insurance Costs
Your new car premium depends on your policy type (Basic vs. Standard), your right-to-sue election, your driving record, and where you live. Urban areas like Newark and Jersey City pay more than suburban or rural areas.
| Car Value | Coverage | 750+ (Excellent) |
700–749 (Good) |
650–699 (Fair) |
600–649 (Below Fair) |
|---|---|---|---|---|---|
| Under $30K | Full | $220 | $292 | $334 | $631 |
| Standard | $160 | $212 | $242 | $458 | |
| Liability only | $105 | $140 | $160 | $301 | |
| $30K–$60K | Full | $260 | $345 | $394 | $745 |
| Standard | $189 | $252 | $287 | $543 | |
| Liability only | $115 | $152 | $174 | $329 | |
| Over $60K | Full | $320 | $426 | $486 | $918 |
| Standard | $230 | $306 | $349 | $660 | |
| Liability only | $124 | $165 | $189 | $356 |
New Jersey Used Car Insurance Costs
Your used car premium depends on your policy type (Basic vs. Standard), your right-to-sue election, your driving record, and where you live and naturally your car value. Urban areas like Newark and Jersey City pay more than suburban or rural areas.
| Car Value | Coverage | 750+ (Excellent) |
700–749 (Good) |
650–699 (Fair) |
600–649 (Below Fair) |
|---|---|---|---|---|---|
| Under $15K | Full | $128 | $170 | $194 | $367 |
| Standard | $107 | $143 | $163 | $308 | |
| Liability only | $73 | $97 | $110 | $208 | |
| $15K–$25K | Full | $153 | $204 | $233 | $440 |
| Standard | $128 | $170 | $194 | $367 | |
| Liability only | $84 | $112 | $128 | $241 | |
| $25K–$40K | Full | $174 | $231 | $264 | $499 |
| Standard | $145 | $193 | $221 | $417 | |
| Liability only | $91 | $121 | $138 | $260 | |
| Over $40K | Full | $199 | $265 | $303 | $572 |
| Standard | $166 | $220 | $252 | $475 | |
| Liability only | $100 | $133 | $152 | $288 |
What Each Coverage Level Means
Full Coverage: Includes collision, comprehensive, and all mandatory no-fault coverages. Typical limits are 100/300/100 liability plus unlimited right to sue. This pays to repair or replace your car after accidents, theft, vandalism, or weather damage. Required if you finance or lease.
Standard Coverage: Meets state minimums with the Standard Policy — liability, PIP, and UM coverage. Most drivers add collision and comprehensive if their car has value worth protecting.
Basic Policy: Meets minimum legal requirements only. Very limited protection — $5,000 property damage, $15,000 PIP, no UM coverage. Only appropriate if you have minimal assets and an older vehicle.
Credit Scores Affect Your Rate in New Jersey
New Jersey allows insurers to use credit-based insurance scores when setting premiums. Drivers with excellent credit save over $2,000 per year compared to drivers with poor credit, according to The Zebra’s analysis.
Your premium is influenced by:
- Credit-based insurance score: Major factor. Poor credit can double your premium.
- Driving record: A speeding ticket adds about $780/year. A DUI adds roughly $786/year.
- Age: A 16-year-old pays an average of $7,870/year vs. $1,497 for drivers in their 50s.
- Location: Urban areas with higher traffic and crime rates pay more.
- Vehicle type: Newer, more expensive cars cost more to insure.
- Marital status: Married drivers save about $71/year on average.
MFP Tip: If your credit has improved since you bought your policy, ask your insurer to re-run your credit-based insurance score. You may qualify for a lower rate without switching companies.
How to Choose the Right Coverage
Buying a New Car
If you’re financing or leasing, your lender will require full coverage including collision and comprehensive. You don’t have a choice on this — it protects their investment.
Beyond lender requirements, gap insurance is worth considering. New cars depreciate 20-30% in the first year. If your car is totaled, your insurance pays the actual cash value (what it’s worth today), not what you owe on the loan. Gap insurance covers the difference.
MFP Tip: NJM, GEICO, and Plymouth Rock offer some of the lowest rates in New Jersey. Get quotes from at least three insurers — rates vary wildly. NJM averages $1,745/year for full coverage, 37% below the state average.
Buying a Used Car
With a used car you own outright, you have more flexibility. The key question: does it make sense to pay for collision and comprehensive coverage?
The 10% Rule: Add up your annual collision and comprehensive premiums. If that total exceeds 10% of your car’s current market value, you might save money by dropping those coverages and setting aside money for repairs or a replacement.
Example: Your 2017 Honda Accord is worth $15,000. If collision and comprehensive cost $1,200/year (8%), keeping those coverages makes sense. If your 2012 Toyota Camry is worth $8,000 and collision plus comprehensive runs $900/year (11%), you might be better off banking the premium savings.
New Jersey Exception: The state is vulnerable to flooding, hurricanes, and nor’easters. Superstorm Sandy alone caused over 56,000 auto insurance claims in New Jersey. Comprehensive coverage protects against flood, falling trees, and storm damage — think carefully before dropping it.
$5,000 Property Damage? The Basic Policy Leaves You Exposed
New Jersey’s Basic Policy is among the most limited in the nation. Here’s where it falls short:
$5,000 Won’t Cover Most Vehicle Damage
The average new car costs over $48,000. Even a minor fender-bender can exceed $5,000 in repairs. If you carry the Basic Policy and cause an accident with a newer vehicle, you pay the difference out of pocket.
The Standard Policy’s $25,000 property damage minimum is better but still limited. Consider raising this limit — a moderate rear-end collision with an SUV or truck can easily exceed $25,000.
No Bodily Injury Liability by Default
The Basic Policy doesn’t include bodily injury liability unless you add it — and even then, it’s only $10,000. If you cause an accident that injures someone, you could face a lawsuit for hundreds of thousands of dollars with minimal insurance to protect you.
The Standard Policy’s 25/50 minimums (increasing to 35/70 in 2026) provide better protection, but medical costs can still exceed these limits for serious injuries.
Limited Right to Sue Restricts Your Recovery
Both the Basic Policy and the Standard Policy with “Limited Right to Sue” restrict your ability to recover pain and suffering damages after an accident. You can only sue if you suffer:
- Death.
- Dismemberment.
- Significant disfigurement or scarring.
- A displaced fracture.
- Loss of a fetus.
- Permanent injury.
If your injuries don’t meet this “verbal threshold,” you’re limited to recovering your PIP benefits — no matter how much pain you’re in or how long your recovery takes.
MFP Tip: The Unlimited Right to Sue option costs more but removes restrictions on your ability to recover pain and suffering damages. If you have assets to protect or want full legal options after an accident, it’s worth the extra premium.
What Shapes New Jersey Rates
New Jersey is a No-Fault State with a Twist
New Jersey operates a “choice no-fault” system. After an accident, your own PIP coverage pays for your medical expenses and lost wages — regardless of who caused the crash.
The “choice” part: You select whether you want Limited or Unlimited Right to Sue when you buy a Standard Policy. This choice affects your premium and your legal options after a serious accident.
With Limited Right to Sue, you can only file a lawsuit for pain and suffering if your injuries meet the “verbal threshold” (permanent injury, fracture, disfigurement, etc.). With Unlimited Right to Sue, you can sue for pain and suffering regardless of injury severity.
Most Densely Populated State
New Jersey has 1,263 people per square mile — by far the highest population density in the nation. More people means more cars, more traffic, and more accidents. This drives up claims costs and premiums for everyone.
Urban areas like Newark, Jersey City, and Paterson see higher rates due to increased traffic, theft, and accident frequency. Rural areas in South Jersey pay less.
Hurricane and Flood Risk
New Jersey is increasingly vulnerable to severe weather. Superstorm Sandy (2012) caused $36 billion in damage statewide and over 56,000 auto insurance claims. Recent years have brought more frequent flooding, even in inland areas.
Comprehensive coverage protects against flood damage, falling trees, and wind damage from hurricanes and nor’easters. Without it, you’re on your own for weather-related repairs.
Lowest Uninsured Rate in the Nation
Only 3.1% of New Jersey drivers lack insurance — the lowest rate in the country (the national average is about 14%). This is partly because New Jersey requires UM coverage under the Standard Policy and enforces insurance requirements strictly.
The low uninsured rate means you’re less likely to be hit by an uninsured driver, but UM coverage is still valuable for accidents with underinsured drivers whose limits can’t cover your damages.
How to Lower Your New Jersey Car Insurance Costs
Shop around aggressively. Rates vary wildly between insurers. NJM averages $1,745/year for full coverage, while other carriers charge $2,768+ for similar coverage. Get at least three quotes.
Choose Limited Right to Sue (if appropriate). The Unlimited Right to Sue option costs more. If you have good health insurance and few assets, Limited Right to Sue can lower your premium — but understand the trade-offs.
Coordinate PIP with your health insurance. If your health insurance covers auto accident injuries, you can elect to have it as your primary coverage. This lowers your PIP premium. Make sure you understand your health plan’s deductibles before choosing this option.
Bundle your policies. Combining auto and homeowners or renters insurance with the same company often saves 10-25%.
Maintain a clean driving record. One speeding ticket adds about $780/year. A DUI adds $786/year. Safe driving pays off in lower premiums.
Improve your credit. With over $2,000/year difference between excellent and poor credit drivers, improving your credit score is one of the most effective ways to lower your premium.
Raise your deductible. Increasing your deductible from $500 to $1,000 can cut your collision and comprehensive premiums by 15-25%.
MFP Tip: New Jersey premiums rose an average of 17% in 2025. With the January 2026 minimum increase to 35/70/25, expect rates to rise further for drivers carrying minimum coverage. Lock in rates now and shop at each renewal.
Buying a Car in New Jersey? Here’s What to Do
Get Insurance Before You Register
New Jersey requires proof of insurance before you can register a vehicle. You must have a New Jersey Insurance Identification Card from your insurer — out-of-state coverage doesn’t count for registration purposes.
Title and Register Within 10 Days
If you purchase from a private seller, you have 10 business days to register the vehicle. Miss this deadline and you’ll pay a $25 late fee. You’ll need:
- The signed-over title (complete the back with the seller).
- Proof of New Jersey insurance (card or policy number).
- Your New Jersey driver’s license (or 6 points of ID if you don’t have one yet).
- Vehicle odometer reading.
- Payment for registration fees and sales tax.
If you buy from a dealer, they typically handle the paperwork for you.
New residents have 60 days after establishing residency to transfer their title and registration. You’ll also need to get a New Jersey driver’s license.
Get Inspected Within 14 Days
After registering an out-of-state vehicle, you must get it inspected within 14 days. New vehicles from dealers receive a 5-year inspection sticker at purchase. Used vehicles are inspected every 2 years.
Review Coverage Annually
Your car loses value every year. The full coverage that made sense for a new $35,000 car may not make sense when that car is worth $18,000 five years later.
Check your coverage at each renewal and adjust based on your car’s current value. With New Jersey’s high premiums, shopping around every year is worth the effort.
End Note
New Jersey’s car insurance system gives you more choices than most states — Basic vs. Standard Policy, Limited vs. Unlimited Right to Sue, PIP coordination with health insurance. Each choice affects both your premium and your protection.
The Basic Policy exists for drivers with minimal assets who need the cheapest legal coverage. But the $5,000 property damage limit and lack of bodily injury liability leave you personally liable for costs that exceed your coverage. For most drivers, the Standard Policy provides better protection.
With minimums increasing in January 2026 and rates already rising, now is the time to shop for coverage. New Jersey’s market has significant price variation — NJM and GEICO often come in well below the state average.
Use the rate tables above to estimate what you’ll pay, then get quotes from multiple insurers. A few hours comparing options can save you hundreds per year in one of the nation’s most expensive states for car insurance.