Why Is Insurance More Expensive in New Jersey?

A look at why certain coverage may be more expensive in New Jersey than in other states, and how you can bring your premium rates down regardless.
Christine Lacagnina Written by Christine Lacagnina
Christine Lacagnina
Written by Christine Lacagnina

Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

Happy mother talking to her baby while working at home. Why Is Insurance More Expensive In New Jersey?

When shopping for coverage for your home and vehicle, it's helpful to know not only what kind of insurance you need, but also how to fit it into your budget. Rates can vary based on your location, and for folks in New Jersey, some of these premiums can be higher than in other states.

Fortunately, an independent insurance agent in New Jersey is just the tool you need in your arsenal to find the most affordable rates. They'll help you get equipped with the right home insurance and car insurance for you at a great price. But for starters, here's a breakdown of why insurance rates can be more expensive in New Jersey.

Why Is New Jersey Insurance So Expensive?

Insurance costs correlate to risk levels. Professionals who set insurance rates evaluate an area's risk, and when they find data that correlates to higher risks in certain locations, the premiums for coverage there must be higher to compensate. That's the case for the state of New Jersey for certain types of coverage. 

What Are the Biggest Cost Factors with Home and Car Insurance?

Your location and the cost to make repairs or to rebuild property are two of the biggest factors that affect the price of your insurance. However, there are many factors that can influence your coverage costs, like:

  • Credit history
  • The insurance company you choose
  • If you bundle your coverage or not
  • Your location
  • The value of what you're insuring
  • The amount of coverage you need
  • The age and condition of what you're insuring
  • Any safety and security features you have/use
  • Any additional coverages you need
  • The deductible amount

Independent insurance agents in New Jersey specialize in finding you the coverage you need at the most affordable rates. They can compare multiple quotes from many different carriers for you together in one place.


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Our independent agents shop around to find you the best coverage.

How Expensive Is New Jersey Car Insurance?

"Full coverage" is a term some insurance companies and customers use to describe car insurance policies with certain types of coverage included. Though not actually a type of coverage itself, "full coverage" often refers to a car insurance policy that includes:

  • $100,000 bodily injury liability per person and $300,000 per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person and $300,000 per accident
  • $500 collision deductible
  • $500 comprehensive deductible

"Full coverage" car insurance rates in New Jersey average about $1,891 annually, or $157 monthly. For a car insurance policy that offers the bare minimum coverage, premiums can average just $855 annually or $71 monthly. 

The most expensive cities for "full coverage" car insurance in New Jersey are Newark, with average rates of $2,683 per year, and Paterson, with average rates of $2,613 per year. In contrast, the least expensive cities in New Jersey for car insurance are Toms River, with average rates of $1,698 annually, and Edison, with average rates of $1,834.

How Expensive Is New Jersey Home Insurance?

Home insurance rates in New Jersey, in contrast to the state's car insurance rates, are much more affordable when compared to the national average. For $250,000 of dwelling coverage, homeowners in New Jersey pay only about $775 annually, which is considerably less than the current national average of $1,383 per year. New Jersey is actually one of the most affordable states in the nation for home insurance.

In fact, New Jersey's homeowners insurance rates are extremely affordable when compared to its neighboring state of New York, which has average rates of $969 per year. Having access to more affordable than average homeowners insurance in New Jersey can help make the above-average rates of car insurance in the state easier to manage. If you find an insurance company that allows you to bundle your home insurance and car insurance together, you can often save even more money on your coverages with a bundling discount.

How Do You Find the Right Home or Car Insurance?

You can find home insurance and car insurance online, or with the help of all types of insurance agents, including captive, direct, and independent. Independent insurance agents offer many advantages over your other choices, however, because:

    • They're local: You can work with an independent insurance agent right in your town, which gives you the advantage of having a professional who knows which local carriers offer the coverage you need at a great price.
    • They shop multiple policies: Independent insurance agents offer the convenience of providing multiple quotes for you so you don't have to shop around.
    • They work with multiple agencies: Independent insurance agents aren't bound to one insurance company, so they're free to really find you the right coverage from the carrier that's the best match for your needs.
    • They can coach you through it all: Your independent insurance agent can apply for coverage for you, as well as file claims and help you update your coverage down the line.

No matter how you find your home insurance or car insurance, just make sure to go with a policy and insurance company that feels right to you.

How to Save Money on Home and Car Insurance

New Jersey's average insurance rates don't necessarily reflect what you'll actually be paying for your specific policies. There are many ways you can save money on your insurance, including:

  • By utilizing discounts: Many discounts are offered for home insurance and auto insurance, like good student discounts, safe driver discounts, veterans discounts, etc., but your options will vary by insurance company.
  • By working with an agent: Working with an independent insurance agent who can shop multiple policies and not just stick to one carrier’s rates can help you save a great deal on your premiums.
  • By bundling your home and auto coverage together: One of the most common discounts and biggest potential ways to save is by bundling home insurance and auto insurance together through the same carrier.
  • By adding safety features to your home and car: Many insurance companies will offer discounts if you add safety features like burglar alarms to your home or vehicle.

If you have existing home insurance or auto insurance and want to know how you can reduce your rates, reach out to your independent insurance agent. They can help you find any discounts or other ways to save that you may not already be taking advantage of.

Why Choose an Independent Insurance Agent?

Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut through the jargon and clarify the fine print so you'll know exactly what you’re getting.

Independent insurance agents also have access to multiple insurance companies, ultimately finding you the best insurance coverage, accessibility, and competitive pricing while working for you

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