For New Jersey residents, rising costs are a familiar challenge, and that trend is now impacting the auto insurance market. Palisades Insurance Company, a subsidiary of Plymouth Rock, is set to implement a rate adjustment for its policyholders in New Jersey. The change goes into effect September 18 and will result in an average premium increase of 6.9% for impacted drivers. This is projected to increase total written premiums by over $11 million across the state, or $236 per policyholder.
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What’s Behind the Change
When an insurance carrier like Plymouth Rock adjusts its rates, it’s not a decision made in a vacuum. An insurance company’s primary function is to pool the risk of thousands of drivers to ensure that funds are available to pay for claims when they happen. If the cost of those claims goes up, the premiums needed to cover them must also increase.
Several key factors are likely contributing to this change:
- Inflation and Rising Repair Costs: This is perhaps the biggest driver of rate increases across the board. The cost of everything has gone up, and that includes car parts, auto body repairs, and the labor required to fix vehicles. Modern cars are equipped with complex sensors, cameras, and intricate electronic components that are incredibly expensive to repair or replace after an accident. A fender-bender today can cost thousands of dollars more to fix than a similar accident five years ago due to this technology. These rising costs directly translate to more expensive claims for insurance companies.
- Increased Accident Severity: While the number of accidents might fluctuate, the severity of those accidents has been on the rise. Factors like increased driving speeds and distracted driving lead to more serious crashes that result in higher payouts for vehicle repairs and medical care. The higher the cost of each claim, the more an insurance company needs to collect in premiums to maintain its financial stability.
- More Frequent Catastrophic Weather Events: Natural disasters and severe weather events, from hailstorms to flash floods, are becoming more common and more intense. New Jersey has seen its share of these events, and each one leads to a surge in comprehensive claims for damaged vehicles. Insurance companies have to account for this increased risk in their pricing models.
- Medical Cost Inflation: When an accident results in bodily injury, the costs of medical care—from hospital visits to physical therapy and rehabilitation—are a major component of an insurance claim. As healthcare costs continue to climb, so too does the cost of paying out on injury-related claims.
These factors create a perfect storm, making it more expensive for carriers to operate and prompting them to adjust rates to accurately reflect the current risk environment.
How to Lower Your Car Insurance Rates
While these rate changes are happening, it’s important to remember that you’re not powerless. One of the best ways to combat rising costs is to be a proactive consumer. Here are some of the most effective tips for lowering your car insurance rates:
- Shop and Compare Quotes: Every insurance company has its own way of calculating risk and setting premiums. As a result, the same driver with the same vehicle can receive wildly different quotes from different carriers. Your current insurer may no longer be the most competitive option for you. Getting quotes from at least three different companies— or using a tool to do it for you— is the best way to ensure you’re getting the best possible price.
- Maintain a Clean Driving Record: A history of safe, violation-free driving is the number one way to signal to insurers that you are a low-risk driver. Avoiding accidents and traffic tickets can earn you significant discounts and keep your premiums low over the long term.
- Bundling Policies: Many insurance providers offer a discount for bundling your auto policy with other insurance products, such as homeowners, renters, or life insurance. This can often result in a substantial savings on both policies.
- Take Advantage of Discounts: You might be eligible for discounts you don’t even know about! Ask your insurer about common discounts for things like:
- Having a good student on your policy
- Installing an anti-theft device or other safety features
- Taking a defensive driving course
- Driving a hybrid or electric vehicle
- Having low annual mileage
- Adjust Your Deductible and Coverage: A deductible is the amount you pay out-of-pocket before your insurance kicks in. A higher deductible typically results in a lower premium. If you have enough savings to cover a higher deductible in an emergency, this can be a great way to reduce your monthly costs. You should also regularly review your coverage. If your car is older and paid off, you may not need comprehensive or collision coverage.
- Improve Your Credit Score: In most states, insurance carriers use a credit-based insurance score as a factor in determining rates. A higher credit score can signal financial responsibility and often leads to lower premiums. Improving your credit can save you money on your car insurance and in many other areas of your life.
Secure Your Insurance Savings
If you’re one of the thousands of policyholders impacted by this increase, don’t wait until your renewal notice arrives to start the process. The sooner you start comparing quotes, the better your chances of finding a more affordable option that offers the same or even better coverage.
Sign up for Auto Quote Tracker to get notified when your insurance rates are about to change, so you can proactively start shopping for new quotes. Don’t let a rate increase catch you by surprise— take control of your insurance costs today.
