Car insurance is a perennial hot-button issue in New Jersey, and car insurance has spiked here and throughout the United States. On average, car insurance consumers saw a 7.2% increase in premiums in 2024 compared with 16.4% last year and 12% in 2022, according to S&P Global Market Intelligence’s RateWatch data. Car insurance premiums are outrunning inflation and squeezing household budgets.
Car insurance premiums have been steadily increasing since 2022. The first spike occurred after pandemic-related supply chain interruptions, followed by a second surge triggered by a series of catastrophic natural disasters, urban theft and increased lawsuits.
Premiums are also rising due to updated liability laws and increased repair costs. Tariffs on Chinese auto parts could boost replacement costs further, though those impacts may not be felt fully until 2026, according to insurance industry experts.
In New Jersey, the average full coverage premium is $1,902 per year, according to carinsurance.com. If you’re the parent of a teen driver, it’s an eye-watering $6,557 a year. Some of the highest rate increases during the second quarter of 2024 were in New Jersey, at a 23.1% increase. In New Jersey, driving incidents can significantly increase premiums, with a speeding ticket raising rates by up to 32%, a DUI raising rates by 72%, and an at-fault accident by up to 79%, according to carinsurance.com. Urban areas like Newark and Jersey City report the highest rates.
