New Jersey’s #1 Insurer to Hike Rates Nearly 6%

For millions of drivers across the Garden State, finding affordable and reliable car insurance is a top priority. As the cost of living continues to evolve, so do the premiums for essential services like auto insurance.

In one unfortunate example of this upward trend, Auto Quote Tracker uncovered an upcoming rate increase from GEICO, New Jersey’s #1 auto insurance carrier, scheduled to impact renewal business starting September 1. If you’re insured with GEICO, there’s still time to shop around and adjust your policy before the increase takes effect.

What’s Happening?

GEICO was recently approved to increase auto insurance rates by an average of 5.9% across the state of New Jersey. This change will increase total written premiums by over $40 million for New Jersey drivers, translating to an estimated $214 per policy.

But just because your rates are going up doesn’t mean you need to pay more. If you’re one of the 179,124 policyholders set to be impacted by this adjustment, there are steps you can take to mitigate the increase.

Why Do Insurance Rates Change? Understanding the Mechanics

It’s natural to wonder why auto insurance premiums increase. Insurers, including industry leaders like GEICO, determine their rates based on a variety of factors. Here are some of the primary reasons why you might see a change in your premiums:

• Increased Claims Costs: The cost of repairing vehicles and medical expenses for injuries sustained in accidents has been steadily rising. More sophisticated vehicle technology, higher labor costs, and elevated medical inflation all contribute to this trend. When the cost to pay out claims goes up, insurance companies must adjust premiums to maintain their financial solvency and ability to pay future claims.
• Frequency of Accidents: An increase in the number of accidents on the road directly impacts an insurer’s financial outlay. Factors like distracted driving, increased traffic volume, and adverse weather conditions can all contribute to a higher frequency of claims.
• Inflation: Like many other industries, the insurance sector is not immune to inflationary pressures. Everything from the cost of parts and repairs to administrative overhead and operational expenses can increase, necessitating premium adjustments.
• Catastrophic Events: While New Jersey may not experience hurricanes as frequently as some southern states, it is still susceptible to severe weather events that can cause widespread property damage to vehicles. Large-scale events like floods, severe storms, or even significant hailstorms can lead to a surge in claims, impacting future rates.
• Fraud: Unfortunately, insurance fraud is a persistent issue that drives up costs for everyone. Insurers invest resources into combating fraud, but the costs associated with fraudulent claims are ultimately spread across the policyholder base.
• Regulatory Changes: State-specific regulations and requirements can also influence insurance rates. Changes in laws regarding minimum coverage, tort reform, or other consumer protections can affect how insurers price their policies.

Strategies to Save on Car Insurance in New Jersey

While premium adjustments are a part of the insurance landscape, New Jersey drivers are not without options when it comes to finding cheap car insurance. Even when faced with rate changes, there are proactive steps you can take to lower your premiums or at least counter the impact of an increase.

1. Shop Around and Compare Quotes: Don’t simply renew your policy without exploring other options. Utilize online comparison tools to get quotes from a variety of carriers. You might be surprised by the variation in prices for similar coverage from different providers.
2. Bundle Your Policies: Many insurance companies offer discounts if you bundle multiple policies, such as auto and home insurance, with them. This can lead to significant savings across all your lines of coverage.
3. Increase Your Deductible: Opting for a higher deductible means you’ll pay more out-of-pocket if you file a claim, but it can substantially reduce your monthly or annual premium. Just ensure you have enough savings to cover the higher deductible if an accident occurs.
4. Ask About Discounts: Insurance companies offer a wide array of discounts that many policyholders might not be aware of. Common discounts include:
   • Good Driver/Accident-Free: For maintaining a clean driving record.
   • Multi-Car: If you insure more than one vehicle with the same company.
   • Safe Driver Program: Using telematics devices or apps that monitor your driving habits.
   • Good Student: For young drivers who maintain good academic standing.
   • Defensive Driving Course: Completing an approved defensive driving course.
   • Low Mileage: If you drive less than a certain number of miles per year.
   • Vehicle Safety Features: For cars equipped with features like anti-lock brakes, airbags, or anti-theft devices.
5. Maintain a Good Driving Record: This cannot be stressed enough. Avoiding accidents and traffic violations is the most effective way to keep your premiums low over the long term. Insurers reward responsible drivers.
6. Improve Your Credit Score: In many states, including New Jersey, your credit score can influence your insurance premiums. A higher credit score often correlates with lower insurance rates, as insurers view individuals with good credit as lower risk.
7. Review Your Coverage Regularly: As your life circumstances change, so might your insurance needs. If you’ve paid off your car, you might consider dropping collision and comprehensive coverage. If your car is older, the cost of these coverages might outweigh their benefit.
8. Consider Your Vehicle Type: Certain vehicles are more expensive to insure due to their higher repair costs, higher theft rates, or greater likelihood of being involved in accidents. If you’re in the market for a new car, research insurance costs before you buy.

Staying Informed and Empowered

While GEICO upcoming adjustment is a normal occurrence in the industry, it serves as a timely reminder for all New Jersey drivers to actively manage their auto insurance policies. By understanding the factors that influence rates and proactively seeking ways to save, you can ensure you’re getting the best possible value for your car insurance in New Jersey.

To stay on top of your auto coverage, make sure you’re getting timely news about your policy. Sign up for Auto Quote Tracker to get rate change alerts delivered directly to your email inbox.