New Jersey drivers are heading into 2026 with a problem: a larger bill is on the way.
Auto insurance rates in New Jersey are rising dramatically this year—a pace far larger than anywhere else in the nation. While most U.S. drivers will see little change in their rates, New Jersey motorists are facing a double-digit jump when policies renew.
The latest industry data estimates New Jersey’s average auto insurance costs will increase by over 10% in 2026. Nearly double that of the next-highest state.
So why is New Jersey such an outlier?
A major factor to NJ car insurance increases is the recent overhaul of the state’s minimum insurance requirements. Drivers are now required to carry higher levels of liability coverage, which increases the baseline cost of every policy sold in the state. No one is safe from increases—even motorists with clean driving records will see a spike.
Claims costs are also poised to rise. Repair bills are more expensive due to higher labor rates, supply chain shortages, and increasingly complex vehicle technology. Advanced safety features may reduce crashes over time, but when accidents do happen, they’re often pricier to fix.
New Jersey’s dense population and traffic congestion also play a role. Insurers factor increased risk of claims into pricing.
Nationally, insurance markets are stabilizing after years of inflation driving them upward. However, New Jersey is moving in the opposite direction.
Higher premiums are likely unavoidable in 2026, even for NJ drivers who haven’t filed claims or changed coverage.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.