What’s the true cost of auto insurance in New Jersey?
🚘 Report says auto insurance premiums are lower in NJ this year
🚘 A competitive marketplace is a major factor
🚘 You can shop around for better rates
The percentage of one's income spent on auto insurance can vary greatly from state to state.
In New Jersey, that figure is 3.21%, according to a new analysis from financial services company Bankrate, which uses the income measure to determine an area's "true cost" of auto insurance.
Nationally, the percent of income spent on auto insurance is just under 3%, according to the report.
Bankrate's report notes that the 2023 average annual premium in the Garden State is $1,754 — a drop of more than $130 since 2022.
In nearly every other state, the average premium increased year-over-year.
NJ has a competitive auto insurance marketplace
According to Gary La Spisa, vice president of the Insurance Council of New Jersey, consumers here are benefiting from the presence of a competitive auto insurance marketplace. According to the New Jersey Department of Banking and Insurance, close to 80 companies are selling auto insurance in the state.
"Carriers have to be careful about their premium increases because they have to compete with other companies," La Spisa said.
And even better news for New Jerseyans, La Spisa said, is the fact that Bankrate's report doesn't take into account available discounts for consumers who, for example, bundle auto insurance with their home coverage, or need coverage for more than one vehicle.
"If you've got a couple of cars and you add your home to the same policy, you could save a couple hundred bucks a year," he said.
At least 1.1 million drivers in New Jersey, though, are paying more for auto insurance this year than last year. On Jan. 1, the state hiked the minimum amount of coverage that drivers must have.
Shop around for insurance
For its analysis, Bankrate sought out rates based on a 40-year-old male and female driver with a clean record, driving a 2021 Toyota Camry and traveling 12,000 miles annually. The hypothetical driver is purchasing $100,000 bodily injury liability, $500,000 property damage liability, and more.
Each insurance company uses different factors in determining a driver's premium, La Spisa said. So that's why shopping around for rates is "critical."
"A driver that one carrier thinks is a high risk, another carrier might view as a moderate or low risk," he said.