Auto insurance rates in New Jersey are rising, with consumers feeling the financial strain. In 2024, the average cost of car insurance in the state is $2,649 annually for full coverage and $1,080 for minimum coverage—both significantly higher than the national averages.
New Jersey’s rates are 8% above the national average for full coverage and 59% higher for minimum coverage, with premiums varying based on factors such as location, age, and driving history.
Critics argue that rising costs are driven largely by legal practices, with some blaming attorneys for exploiting the legal system.
Stacy Lavacca of Ask Stacy Insurance recently posted on Facebook, highlighting insurance companies that have received approval for rate increases of more than 15%.
“I put together a spreadsheet of New Jersey auto companies who have gotten approved by the state for more than a 15% increase starting in 2023, or those whose current requests to the state will exceed 15%,” Lavacca said.
Lavacca pointed out that several companies have already raised rates multiple times in the past two years, while others are awaiting approval for further hikes.
Insurance industry experts suggest that legal reforms, particularly tort reform, are necessary to address the root causes of high insurance costs and protect consumers from rising premiums.
New Jersey remained on the American Tort Reform Association's (ATRA) Judicial Hellholes Watch List in 2023 due to concerns about rising lawsuit abuse, largely attributed to the influence of the plaintiffs' bar.
“New Jersey policymakers need to wake up and accept reality: An unfair and imbalanced civil justice system that is tilted against the business community invites runaway litigation and increases the cost of living and doing business for everyone in the Garden State,” Anthony Anastasio, president of the New Jersey Civil Justice Institute, told the New Jersey Monitor.
ATRA notes that Senate President Nicholas Scutari, a practicing personal injury attorney, has used his position to push pro-plaintiff policies, including the “New Jersey Insurance Fair Conduct Act,” which could lead to high-stakes litigation over undefined terms like “unreasonable” insurance claim delays.
Scutari also succeeded in raising mandatory auto insurance coverage levels, increasing the potential payout for plaintiffs and encouraging more lawsuits.
In 2023, the plaintiffs' bar advocated for legislation mandating attorneys' fees in workers' compensation cases and supporting “mass arbitration,” a tactic used to pressure businesses into settling by filing thousands of identical arbitrations.
This legislative push is compounded by a leftward shift in the New Jersey Supreme Court and lower courts, leading to increased liability for businesses. The plaintiffs' bar is also targeting arbitration clauses, seeking to prevent businesses from using bellwether processes to reduce arbitration fees.
Progressive Gov. Phil Murphy has been criticized for being unsupportive of civil justice reforms, having signed several liability-expanding bills into law and supporting the plaintiffs' bar in court.
