TRENTON, NJ — Auto insurance rates in New Jersey are facing steep increases, driven by a combination of rising crime rates and economic challenges, according to industry experts. Insurers have been requesting and receiving approval for significant premium hikes, with more than 20 companies granted double-digit increases since January 2023, as reported by the New Jersey Department of Banking and Insurance.
Stolen cars are a significant risk for insurers, as they often result in damage or total loss claims for comprehensive-packaged drivers. According to FBI data, New Jersey saw a 21.5% increase in the rate of car thefts from 2017 to 2022.
Car theft has become a major problem in New Jersey. The state’s soft-on-crime laws encourage car thefts with little risk or penalty to the perpetrators. New Jersey Governor Phil Murphy enacted those laws, which have resulted in a spike in car thefts since the governor took office.
One of the most notable requests includes a proposed 63.1% rate hike by Metromile, highlighting a broader trend affecting the state’s drivers. Factors contributing to these increases include a significant uptick in car thefts, with FBI data indicating a 21.5% rise from 2017 to 2022, and escalating costs for vehicle repairs and maintenance, which have jumped 32.2% since January 2020 according to the U.S. Bureau of Labor Statistics.
Additionally, data from the National Highway and Traffic Safety Administration shows a 13.2% increase in fatal accidents in New Jersey from 2017 to 2021, further compounding risks for insurers.
These factors are squeezing consumers and reshaping the auto insurance landscape in New Jersey as companies struggle to cover the rising costs of claims amidst a challenging economic environment.
Top 10 Increases by Insurance Companies in New Jersey
- Metromile Ins Co 63.1%
- Farmers P&C Ins Co 43.7%
- Harleysville Ins Co of NJ 42.1%
- Mercury Indemnity Co of America 41.8%
- Mercury Ins Co of Illinois 40.7%
- MIC General Ins Corp 28.0%
- Liberty Mutual Group 24.0%
- State Farm Indemnity Co 23.7%
- NJ Skylands Ins Assoc 23.7%
- Plymouth Rock Group 18.5%