TRENTON, N.J. (KYW Newsradio) — Car insurance rates will go up for more than 1 million drivers in New Jersey if the governor signs a bill that passed both the Senate and Assembly on Wednesday. The increase is expected to hit low- and middle-income families hardest.
This legislation increases the required mandatory minimum for certain liability insurance from $15,000 to $25,000. Bill sponsor Senate President Nick Scutari Senate said New Jersey has the lowest minimum coverage in the nation. He is an attorney who has worked on insurance cases, and he says this increase in liability coverage is needed to protect people from themselves.
Opponents in Trenton say it’s the wrong bill at the wrong time, as working-class families are already struggling with gas prices and the soaring costs of inflation, and this is the last thing they need.
“That is high, though it is adequate to cover the average claim right now,” said Christine O’Brien, president of the Insurance Council of New Jersey. She says the average claim is $18,000, so moving beyond the $15,000 level isn't a bad idea, even if it will cost people $130 more a year.
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The bill also includes a scheduled increase to $35,000 in coverage in 2026. O’Brien says that’s a step too far because no other states are at that level.
“We would be an outlier,” she said.
She also says raising rates further might be a tipping point, prompting families to opt to drive without insurance. Right now, Jersey is among the states with the lowest percentage of uninsured drivers, but O’Brien cautions that could change if affordability becomes an issue, and everyone will pay the price for that in the long run.