Why Is My Car Insurance Rate So High in New Jersey?

If you feel like your insurance rate is high, you’re not alone. Car insurance rates are on the rise. Cars are more expensive to purchase and repair, and there are more drivers on the road than ever before, which naturally increases the risk of auto accidents and drives up the cost of insurance. Rising medical costs are also a factor in rising costs. Car insurance isn’t cheap, but something to consider is the rate you’re paying in comparison to similar drivers. Here are some possible explanations to the question “Why is my car insurance rate so high in NJ?”

Factors Considered When Carriers Determine Your Rate

There are several risk factors that all car insurance carriers consider when quoting your rate and deciding what your rate will be. Generally, there are six factors that are commonly considered: your age, vehicle type and driving history. Statistical analysis of auto claims history over a period of many years will provide an insurance carrier with the risk intelligence needed to determine your rate. For example, if you’re under age twenty-five, expect to pay more for car insurance than drivers in other age groups. Likewise, if you live in a highly-populated area or have a history of moving violations or late payments, you’re very likely going to pay more for car insurance.
Keep in mind that car insurance carriers will generally look at consumer reports that consider the last five years of your driving history and your prior insurance record. You will have the opportunity to appeal any information you feel is in error, as information obtained from a consumer report that results in a higher rate must be disclosed to you, along with the contact information of the consumer reporting company that provided it.

Not-So-Obvious Factors That Drive Up Insurance Rates

You may have already been aware of the more common risk factors that auto insurance carriers consider, but there may be other costly factors that you’re not even aware of. Much like a credit score, insurance carriers may assign you an insurance score that weighs heavily in determining the rate you pay for car insurance coverage. The following are very important risk factors tied to your insurance score that may be driving up the cost of your coverage.
Coverage Gap: If you’ve had a policy lapse as a result of unpaid premium, you’ll have a gap in coverage in your history, which can lower your insurance score and raise your rate. It’s very important you maintain continuous insurance coverage even if there’s a brief period when you don’t drive or own a vehicle.
Aggressive Shopping: You’ve been conditioned to shop around for the best deal or rate on the things you buy. Shopping can be a good practice for car insurance provided you don’t overdo it. If you switch carriers every year in an attempt to lower your rate, you may be hurting yourself by lowering your insurance score instead; this will essentially increase your rate defeating the whole purpose of shopping to begin with. You will typically get better rates when you have been with your prior carrier for three or more years.
Minimum Coverage: If you perpetually carry only the required minimum coverage and limits on your car insurance policy, you will lower your insurance score over time. If you think always carrying minimum coverage will keep your insurance rate down – think again. You may end up paying the same premium (for your minimum coverage) as other drivers with considerably more coverage. Think of purchasing minimum coverages as a risky behavior.
Other Drivers Listed on Your Policy: Another thing to consider is that your policy’s rate may include driving activity and other attributes from all licensed drivers in your household. It’s your responsibility to be familiar with the risk factors the other drivers listed on your policy present, and how their individual risk factors could potentially increase your overall risk as a policyholder, which in turn may drive up the rate of premium that you pay.

NJ Auto Insurance Rates Compared to National Rates

With all things being equal, it’s interesting to consider what you’re paying for car insurance as a resident of New Jersey compared to what other drivers are paying across the United States. The following comparison chart shows the highest, middle and lowest average rates paid by drivers in NJ cities compared to the national and state average rates of $2,390 and $3,013 respectively. New Jersey residents generally pay more for car insurance than the national average because NJ is one of the most densely populated states in the country.

Data Source: Lending Tree, Inc. (ValuePenguin.com)

The overall average car insurance rate that New Jersey residents pay is $3,013 which is 26% higher than the national average rate of $2,390. It is worth mentioning the average rates are based on “full coverage” (liability and other required coverages, plus comprehensive and collision). Out of 100 NJ municipalities surveyed, Newark residents paid the highest annual car insurance premium with an average rate of $3,326. Millville residents showed a median rate of $2,365 while Point Pleasant residents are paying the lowest average car insurance premium at an average annual rate of $1,793. *

Ways to Potentially Reduce Your Car Insurance Rate

There may be some risk factors over which you have little control; however, there are numerous ways you can be proactive in potentially reducing the rate you pay for car insurance. For example, bundling home and auto coverage, raising your deductibles, or shopping around may produce substantial savings. Take advantage of any policy discounts your carrier may offer such as vehicle safety features discounts, completion of a defensive driver course, being a good student and membership in a listed affinity program. Remember, testing the auto insurance market too frequently can potentially hurt your insurance score if you change carriers often.

Final Thoughts on Why Your Insurance Rate Is So High

So, why is your car insurance rate so high? That’s a surprisingly complex question… Hopefully you’ve been able to identify some things you can adjust to lower your car insurance rate. Consider ways to reduce the risk you present as a driver and insurance consumer, including paying your premium on time, carrying adequate (more than minimum) coverage and being a safe driver. If you’re in search of a New Jersey car insurance carrier that will take the time to explain your coverage options and help you explore potential discounts, consider Plymouth Rock Assurance. Plymouth Rock offers personalized coverage options, experienced representatives and exclusive affinity programs. Call or complete an online quote today!

*Methodology: Car insurance quotes were collected from every state in the country and the District of Columbia representing fifty-one insurance carriers for a thirty-year-old male driver operating a 2015 Honda Civic EX with full coverage.
Plymouth Rock Assurance® and Plymouth Rock® are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. Insurance in New Jersey is offered by Plymouth Rock Management Company of New Jersey on behalf of High Point Property and Casualty Insurance Company, Palisades Insurance Company, Palisades Safety and Insurance Association, Rider Insurance Company and their affiliates. Each company is a separate legal entity that is financially responsible only for its own insurance products. Actual coverage is subject to the language of the policies as issued by each separate company.

Call 855-993-4470, get your free quote online or find a local agent to see if Plymouth Rock Assurance can help you understand why your car insurance rate is so high. If you need additional information, please visit our Contact Us page.