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UPDATED: Jan 10, 2019
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Recently legislators in New Jersey have proposed a new set of laws that will likely curb Newark car insurance rates further. The new laws are geared towards closing the loopholes in personal injury protection (PIP) plans.
It is notable that Newark has been among very few cities that have seen a reduction in its car insurance rates.
We can help you save on New Jersey car insurance when you enter your ZIP code into our search tool located at the top of this page!
Why is Newark’s Location Relative?
As a seat of the most densely populated county in the United States, Newark is strategically positioned to provide its residents an excellent standard of living.
Becasue of the proximity to New York and a reputation as a major transportation hub, life in this city revolves around a vast network of roads and highways.
Newark is only 13 km from Manhattan and offers numerous public facilities. Yet many residents of Newark prefer to own a car.
The new bill, if passed, will help to further decrease Newark car insurance rates by tackling the rising costs associated with PIP. People of Newark have welcomed such legislations that have helped their community ease the increasing costs of automobile insurance.
Furthermore, a substantial decrease in auto thefts and related crimes is yet another sign of honest efforts by local government to help Newark residents. Take a look at the Most Stolen Cars of 2010!
Car Ownership in Newark
Since Newark is a gateway to greater New York area, owning a car means that people can tap into the employment resources of New York City and Central New Jersey. Moreover, Garden State Parkway, New Jersey Turnpike, and Route 280 offer rapid access to the major financial centers of coastal New Jersey, Trenton, and the state of Delaware respectively.
Access to these resources may also be the reason that nearly 70 percent of Newark population either uses a car or carpool to commute to work.
Accordingly, statistics reveal that a majority of residents don’t have to travel more than 30 minutes to work.
Most residents of Newark own a used car. Logically, the price of a used car is less than new cars in the market.
Despite the price difference, it is not uncommon to find people who opt for full insurance instead of liability only.
For example, if a car is priced at $1,000, it does not make sense to pay a $150 monthly premium. In the case of an accident, the maximum amount paid will only be $1,000. Hence, residents should take into account this pricing factor when shopping for Newark car insurance.
Newark Car Insurance Policies
As an owner of a vehicle, residents have to abide by New Jersey transportation laws requiring all drivers to obtain car insurance. Without car insurance, drivers can find themselves confronted with fines that are more stringent than they are in other states.
The New Jersey government introduced the basic insurance policy, as well as two other types of insurance, to help curb the increasing car insurance costs.
All Newark residents have to get at least a basic insurance policy. The basic insurance policy is designed to offer coverage to drivers who have less family responsibility or does not have the financial means to buy a standard car insurance plan.
Experts suggest that young drivers, students, and low-income families should opt for basic Newark car insurance.
As per New Jersey laws, all insurance agents are required to offer a standard rate for a basic policy. The insurance rates for a basic policy may differ due to a wide variety of optional coverage.
There are three major differences between a basic and a standard policy:
- A basic insurance policy costs less, and the charges are regulated by the Automobile Insurance Cost Reduction Act.
- A basic policy will not cover any motorist if they get injured by an uninsured driver.
- Bodily injury liability is optional for all drivers. It means that the basic package does not include the cost of lawsuits and claims by other people who are injured due to your negligence. Still, there is an option for bodily injury coverage of $10,000 at an additional cost.
Most drivers opt for standard Newark car insurance coverage. According to New Jersey automobile insurance laws, standard insurance automatically includes:
- Bodily injury liability
- Property injury liability
- Personal injury protection
Additional coverage includes collision and comprehensive coverage, which allows drivers to claim compensation in case of theft or any type of collision.
It is important to note that the cost of insurance coverage will vary greatly from person to person. Also, the choice of your insurance will affect your family members as most insurance agencies in Newark offer the option to include your spouse and children.
Additionally, insurance agents will offer two choices for right to sue:
- Unlimited Right to Sue
- Limited Right to Sue
A driver can sue others only if there is significant damage to their body resulting in loss of body parts, disfigurement, loss of a fetus, and/or displaced fracture, etc.
As a helpful hint, remember that Newark falls under the jurisdiction where insurance law permits most drivers to be covered for $250,000 personal injury protection, even if they have a lower PIP protection.
Therefore, it is vital to consult your insurance agent and read the disclaimer to find additional coverage that you can get without paying an extra fee.
New Jersey government has recently announced an initiative to make auto insurance coverage available for $365 per year to help Federal Medicaid receipts. This insurance coverage is known as Special Automobile Insurance Policy (SAIP).
Federal Medicaid recipients can call 1-800-446-7467 to get more information.
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Newark Car Insurance Companies
According to New Jersey Department of Banking & Insurance, there are more than 40 car insurance companies that are licensed to provide private auto insurance. Some of the most prominent names include AAA Mid-Atlantic Group, All State, Geico, Farmers Insurance, Liberty Mutual, Metlife, Progressive, and State Farm Insurance.
Most of the larger companies in Newark are the direct writers of their insurance policies. It means that their sales employees are eligible to write insurance policies for their customers. Notable among these are:
- AAA Mid-Atlantic Group (Also known as Keystone Insurance Company)
- Amica Property and Casualty Insurance Company
- Balboa Group
- California Casualty & Fire Insurance Company
- Citizens United Reciprocal Exchange (CURE)
- Farm Family Casualty Insurance Company
- Farmers Insurance Group
- Geico Group
- Hartford Underwriters Insurance Company
- High Point Group
- IDS Property Casualty Insurance Company
- IFA Insurance Company
- MetLife Auto and Home
- New Jersey Manufacturers Group
- Progressive Group
- Unitrin Direct Group
- USAA Group
Actually, customers find it convenient to negotiate with representatives of companies that write their own insurance. It means that customers can influence their representative to devise an insurance policy according to the specific needs of the driver. Nevertheless, direct agents may not always be the best choice.
Consumers may also find great New Jersey car insurance rates from agents.
Accordingly, some of the well known Newark car insurance companies that have agents are:
In addition, there are also some specialty car insurance companies in Newark that advertise heavily for antique auto, collector auto, and motor homes etc. Progressive Garden State Insurance Company and State Farm Guaranty Insurance Company are examples of such organizations.
It is also important to check on the 2015 New Jersey Auto Insurance Consumer Information Report. This report outlines the complaint rate ratio of each insurance company.
Apart from rates, consumers can always compare different companies by evaluating their quality standards. The report is publicly available on the official website of New Jersey Department of Banking & Insurance.
Car Insurance Rates in Newark
Due to a wide range of factors, Newark car insurance rates are usually higher than neighboring localities. These high rates are heavily influenced by state laws, making New Jersey residents pay the second highest premium on auto insurance in the country. On average, Newark inhabitants pay almost $3,125 every year.
Compare this to nationwide rates and rates for other municipalities:
- Newark rates: $3,127
- Essex County rates: $2,820
- New Jersey rates: $2,192
- Nationwide rates: $1,414
Newark Car Insurance Trends
Based on recent trends, Newark residents pay between $200 and $350 on their monthly car insurance. Geico and Progressive are quoted as the most expensive insurance companies in the area. Allstate and Liberty Mutual are also considered expensive but usually quote less than Geico. Among large companies, AIG and State Farm are the least expensive.
Still, many other low profile insurance companies are becoming extremely competitive by providing better customer service. Therefore, it is necessary to get quotes from as many car insurance companies as possible. Keep in mind that your insurance depends on a variety of factors and similar looking profile may have a difference of more than $1,000.
Rates in Newark may seem high, but buyers should understand that these rates are mostly influenced by legislations of local government. For example, residents of Detroit pay more than $5,500 for car insurance, which makes Newark look cheaper in comparison.
Fortunately, these insurance rates have been in decline since 2003. Hopefully, rates for Newark car insurance will continue to decline in the future. Nevertheless, potential car owners should always get multiple quotes for the best deal.
Compare car insurance quotes online with our FREE ZIP code search at the bottom of this page!