Why Prices Are Rising
Insurance representatives point to several factors behind the sharp increases.
Recent changes to state law raised minimum liability coverage requirements. Drivers must now carry higher protection levels for bodily injury claims, which increases insurer payouts and pushes up premiums.
Legal reforms tied to accident-related lawsuits have also played a role. Industry officials say greater disclosure requirements and litigation trends are leading to larger settlements and court awards.
Broader economic pressures add to the strain. Repair costs have surged since the pandemic, driven by higher prices for parts, labor shortages at body shops, and supply chain disruptions. Tariffs affecting major auto parts suppliers have compounded those expenses.
Together, those factors have widened the gap between what insurers collect in premiums and what they pay in claims, prompting companies to seek larger rate adjustments.
Not a Crisis — Yet
Despite the increases, experts say the state is not facing the kind of insurance market instability seen decades ago, when some companies stopped writing new policies and drivers struggled to find coverage.
Today, dozens of insurers still operate in New Jersey, maintaining competition. Industry leaders say the system remains stable, though they warn that continued cost pressures could create challenges if companies are unable to price policies sustainably.
