At least 1.1 million NJ drivers will pay more for auto insurance next year. Here’s what you need to know.


Govt. Phil Murphy recently signed a bill that will force more than one million New Jersey drivers to pay more each year in car insurance.

Proponents of the bill say the measure is long overdue because accident victims have not always been able to get their medical expenses covered with a low-coverage option that was on the books. Opponents, meanwhile, argued that the increase would come at the wrong time and would disproportionately affect low-income residents.

Here’s what you need to know:

What did the new law do?

It requires the minimum amount of liability insurance in the Garden State of its current coverage of $15,000 to $25,000 starting in 2023, and a minimum of $35,000 starting in 2026. The minimum coverage of $25,000 also mandates $50,000 coverage for accidents when more than one person is injured and the $35,000 minimum in 2026 will require a minimum coverage of $70,000 when multiple people are injured.

Will drivers pay more in 2023?


“I see it as very simple math,” said Christine O’Brien, president of the Insurance Council of New Jersey. Drivers who currently have the lowest coverage of $15,000 can expect to pay between $120 and $130 more each year through 2026, insurers said.

The reason they know how much the extra drivers will pay is because the carriers already offer the $25,000/$50,000 minimums, so they know the difference between the two plans and don’t have to ask the Department of Banks and state insurance to raise rates.

How many pilots will this affect?

Estimates from insurers and the Insurance Council of New Jersey range between 1.1 million and 1.36 million drivers. If you currently have coverage below a $25,000/$50,000 minimum, you will pay more next year.

Why was it necessary?

Lawmakers who pushed the bill say it is long overdue and carriers actually agreed to a $25,000/$50,000 raise as the bill was debated at the Statehouse. Why? Because the average personal injury accident settlement is $18,000, which is $3,000 more than the current lowest minimum coverage option of $15,000.

“We always thought it was a good political discussion to have,” O’Brien said.

How much will drivers pay in 2026?

This is still an open question. Insurers don’t offer $35,000/$70,000 plan options across the country, so there’s nothing to compare, according to O’Brien. “We can’t really tell you right now what impact this will have,” she said.

It is then likely that at that time they will need to obtain clearance from the Department of Banking and Insurance if carriers decide they need to raise fares.

Under state law, “P&C insurers, which include auto insurers, are permitted to file applications with the department to change their rates or rating systems. Any rate change must be reasonable, adequate and not unfairly discriminatory. If the department finds that a rate request by a carrier is unreasonable, improper, or unfairly discriminatory, the request will be disapproved, in accordance with state law.

Although the New Jersey Insurance Board supports the initial increase in coverage next year, it opposed the new law because of this 2026 increase.

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