How are New Jersey Car Insurance Rates Determined?

There are multiple factors that determine New Jersey car insurance rates. These include your driving history, the type of insurance coverage you choose, the type of car you drive, and how your car insurance company looks at these factors together.

A driver’s risk of having an accident
New Jersey car insurance rate factors

A Driver’s Risk of Having an Accident 

New Jersey car insurance rates are largely based on figuring out how likely a driver is to get into an accident. Car insurance companies consider the factors below when determining car insurance rates.

• Your driving and insurance history
• Your vehicle
• Information about you

Drivers are grouped into tiers and assigned a rate once their accident risk is assessed. Different car insurance companies use different factors when determining car insurance rates. This is true for car insurance companies that serve New Jersey as well as national carriers.

Common Factors New Jersey Car Insurance Companies Use to Determine Rates 

The following are the common factors that affect New Jersey car insurance rates, according to the New Jersey Department of Banking and Insurance:

• Driving Record: If you or a member of your household has a driving record that includes motor vehicle violations, suspensions or accidents, your New Jersey car insurance rates might be higher than drivers with few or no violations, suspensions, etc.
  
  Each car insurance company has underwriting guidelines to determine the extent to which accidents and violations can increase low car insurance rates.
  
• Vehicle Type: The make, model and value of a car affect the cost of your insurance rate. Generally, an older car will cost less to insure, while a high performance or luxury car will cost more. This can vary among New Jersey car insurance companies and national carriers.
  
• Geographic Area: Where you drive and garage your car also influences your car insurance rate. Similarly, the number of claims filed by policyholders in your territory will affect the rates charged by New Jersey car insurance companies.
  
• Gender and Age: Some New Jersey car insurance companies consider gender and age when determining your insurance rate. Statistics show that on average, males and young adults have more car accidents and claims than other drivers.
  
• Marital Status: Statistically, married couples tend to have less accidents and claims, so they might pay lower premiums than single people.
  
• Vehicle Use: The distance you live from work or school may affect the cost of your New Jersey car insurance. In other words, the more or farther you drive, the higher the risk of an accident. Also, using your vehicle for business use might also affect your insurance rate.
  
• Insurance Score: Most New Jersey car insurance companies use an insurance score based on your credit history as one of the factors in determining risk.
  
• Lapse in Coverage: Not insuring a registered car for any length of time can negatively affect your car insurance rate.
  

It’s important to get multiple quotes from car insurance companies as there are many factors that determine your New Jersey car insurance rates. Call High Point Auto Insurance at 1-800-516-9242 for a free car insurance quote today.

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