Factors That Impact Personal Car Insurance In New Jersey

Auto insurance is a requirement for both all new drivers in New Jersey and all its counties.

There are different types of car insurance, which come at different prices. Quotes for car insurance in New Jersey varies from company to company, and that is usually based on certain factors.

Companies use information based on these factors to determine how much the client will pay for their insurance coverage.

The information tells them whether you are high or low risk and give you a quote based on that. Ideally, the higher your risk, the more money you will pay for your auto insurance.

The factors involved in calculating your car insurance amount range from driving to non-driving and include the following:

Location Location Location

When it comes to location, insurance companies analyze the location where your car is usually parked and how populated the area is.

For rural and less populated areas, the risk of accidents, vandalism and theft are relatively lower as compared to urban areas, and so you’re likely to have a lower quote.

Mercerville, New Jersey is considered a suburban community, and so the quote will probably be somewhere in the middle. In some states, however, your location is not a major consideration.

Age & Experience

The consideration made based on age is centered around driving experience.

Generally, for young, novice drivers, it is their lack of experience, and for the older citizens, it is their slower response to reflexes that makes these groups more prone to accidents. Therefore, the older or younger you are, the higher your quote may be.

How well of a driver someone is, also contributes to how prone they will be to accidents. The rule of thumb is that more experience means lower risk, which may also lead to lower rates.

Driving Record

Some companies are big on safety and will consider how safe of a driver you are to set your insurance rates. The number of accidents, violations and your general history as a driver is a few things that they will consider.

The lower the quality of your driving history, i.e. more accidents and violations, the higher your rate is meant to be. In some cases, you may find it difficult getting insurance that doesn’t require costly premiums.

Type of Car

The different modifications that cars have can affect how a person drives. While some vehicle comes with easy-to-use features, others may be a little more technical to operate, thereby affecting the driver’s experience.

The smoother the car is to use, the less likely it is for the driver to get into accidents. Other things about the car model that can be used to determine the insurance rate include the price of the car, the cost of repairs, safety tests, accident and theft rate.

The higher the chances of these factors, the more you are likely to pay for insurance, and vice versa. If you have additional safety features on your car, then you also have a better chance of getting a lower rate or a discount on your insurance premium.

Credit Score

The use of credit score or history to determine car insurance premium rate is a controversial topic in NJ.

The assumption, which is backed by research, is that the lower a person’s credit score, the more likely they are to file inflated claims, file many claims and sometimes even engage in insurance fraud.

Insurance companies, therefore, charge higher ratings for people with low credit scores. Also, how a person is allowed to pay their premiums is affected by the credit score because the statistics show that people with low credit scores are likely to miss payments.

For example, you may be asked to pay premiums upfront or make some months’ (usually six or 12) payment in advance.

Family Situation

Statistics show that married couples are less likely to get involved in accidents than their single counterparts, which include widowed and divorced individuals.

The reason is that married people are less active, and because they have their families in mind, are relatively safer when on the road.

So, insurance companies usually have discounts for married drivers, especially when they combine their policies with the same company.


While this may sound strange, some statistics show that gender determines driving behavior.

There is evidence that shows that males are riskier drivers, especially at a young age. Females are known to engage in safer driving habits such as wearing a seat belt, adhering to speed limits and not driving when intoxicated.

Males, on the other hand, sometimes become over-confident behind the driving wheel, which tends to make them more likely to crash. Therefore, based on this, car insurance companies in New Jersey tend to have lower rates for females than for males.

However, as males and females reach their 30s, driving behaviors become similar, and so there isn’t any significant difference in the rates charged. However, statistics show that males go back to being high-risk drivers over females as they grow older.

Claims Record

The claims you have already made, whether with them or previous auto insurers, are also going to be analyzed by insurance companies when setting rates.

The more at-fault claims made, the higher your rate is likely to be, and vice versa. Not at-fault or comprehensive claims also have a higher chance of attracting lower rates. In both cases, some companies will consider the amount paid and losses incurred.

The number of claims you make is also important to some insurance companies and the more claims you make within a year, the more likely you are to be considered a high-risk consumer. In that case, you may experience an increase in the amount you pay for your car.

If you will need car insurance in New Jersey, then you would have to consider what factors are considered when setting your insurance rate.

While some of these factors like age and gender cannot be controlled, you should try to control those that are. Putting yourself on the lower end of the risk spectrum will help you reduce costs in the long run.