According to an article published by NJ.com and a report by the National Association of Insurance Commissioners, 2014 marked the fifth year that NJ residents paid the highest car insurance premiums in the nation! In 2014 (the year with the most recent data available), New Jersey drivers paid an average of $1,263 in insurance per vehicle. That marks more than an 8% increase from 2011. The cheapest average rates are available in Iowa, where rates averaged just $585.
New Jersey has been known for its high insurance premiums and more generally for its high cost of living associated with the state. New Jersey is also the state with the highest property taxes. Much of this high cost can be associated to the urban landscape of the state. New Jersey ranks as the most densely populated state with more than 1,200 residents per square mile. This translates to more cars on the road and more accidents.
Since 2010, the average auto insurance bill has consistently climbed. In 2010, rates were $1,157. In 2011, rates were $1,186. In 2012, rates were $1,220. In 2013, rates were $1255. These premium rates follow a troubling trend that seem to outpace the annual inflation rate.
However, there is some good news. More recently, NJ has seen an increase in competition amongst insurance carriers. More companies should mean more options and greater competition might be able to drive prices for consumers down. Hopefully competition will keep rising rates to a minimum. New Jersey has in the past also paid out amounts in dividends to policyholders that are higher than the national average.
So what can you do to reduce your insurance premiums?
1. Compare car insurance quotes among different insurance companies. However, make sure that you are comparing the same amount of coverage. Some companies will save you money by reducing your coverage limits.
2. Increase your deductibles. You can increase the deductible to $1,000 on your collision and comprehensive coverage, which will save you money.
3. Drop the collision or comprehensive loss coverages. If your car is older it may not make sense to keep it insured for collision or comprehensive loss. Remember that in the event of a total loss, the insurance company will only pay you the “book” value of the car which is often far less than you would pay to replace the vehicle.