TRENTON, NJ – After years of steep hikes, U.S. car insurance rates are expected to level off in 2026, with the average national premium rising by less than 1%. But in New Jersey, drivers are bracing for another sharp jump — the largest in the country for the second consecutive year.
According to The State of Auto Insurance 2026 report from ValuePenguin, the national average cost of full-coverage auto insurance will reach $208 per month, up just 0.67% from last year — the smallest annual increase since before the inflation surge of 2022. In contrast, New Jersey insurers are raising rates by an average of 10.46%, making it the only state to see a double-digit increase this year.
The report shows New Jersey’s average premium climbing to $249 per month, ranking it among the 10 most expensive states for auto coverage. Nationwide, the costliest states in 2026 are Nevada, Louisiana, Florida, Connecticut, and Delaware, all exceeding $300 per month on average.
While 32 states are seeing rate decreases this year, New Jersey’s pricing disparity remains wide depending on location. Drivers in Manasquan, Point Pleasant, and Sea Girt will see the lowest rates — roughly 16% below the state average — while residents of Irvington and Newark face premiums 51% higher than average.
Despite the overall increase, analysts say consumers in New Jersey can still benefit significantly from comparison shopping. The report found a 146% difference between the cheapest and most expensive insurers for identical coverage levels.
Nationwide, the 2026 slowdown marks a shift after back-to-back years of double-digit increases — 11.6% in 2023, 17.1% in 2024, and 7.6% in 2025 — driven by inflation, rising repair costs, and record claims payouts.
U.S. car insurance costs are finally stabilizing in 2026, but New Jersey drivers continue to face the nation’s steepest rate hikes for the second straight year.