New Jersey – Factors that Affect Auto Insurance Rates


New Jersey has relatively high insurance premiums compared to other states around the country. It pays to shop around and use every possible discount to get the best rate possible. One tool that can help you save on insurance is understanding the factors that affect car insurance rates in New Jersey. This article will provide you with a list of those factors, and what you might be able to do to improve your odds with some of them.

Actuaries are the professionals who calculate risk for various drivers and vehicles and produce formulas according to those risks. These formulas determine insurance rates for an individual based on how much calculated risk he has. It is important to know what goes into these calculations when you are shopping for car insurance. In some cases, you can change your risk factor by changing the type of vehicle you drive and maintaining a clean driving record. Other times, knowing what the risk factor might be will enable you to shop around for the best rate despite those factors.


Demographics may not be factors you can change, but they play a huge role in the amount of car insurance premiums you pay. As a general rule, young people (under the age of 25) are a higher risk and pay more for insurance. This is particularly true if you are a male between the ages of 16 and 25. To bring down the premium somewhat, make sure the insurance company knows if your young adult is on the honor role at school. Teens with good grades usually pay slightly less for insurance coverage.

By the same token, people over the age of 65 are also considered higher risk and may pay similar premiums to teenagers. Make sure if you fall into this high risk category that you are driving a low profile vehicle that has plenty of safety features and an anti-theft device to help offset the increased rates due to age. Maintaining a good credit history and a clean driving record can also improve your image in the eyes of auto insurance agents.

Where you live also affects how much you pay for insurance. Those who live in bustling cities are seen as higher risk for accidents than those living in rural farm areas. If you call a major city home, make sure your insurance company knows if you reduce the mileage on your vehicle by carpooling or taking public transportation to work. Having a desk job is also seen as lower risk than mobile professions that spend many hours a day behind the wheel.

The first step in lowering insurance premiums is understanding the factors that go into determining those rates. By educating yourself, you can combine low risk with high risk factors to get the best insurance rates possible.