Our opinion: NJ auto insurance increases the necessary pain

New Jersey drivers may not be happy with the cost of their auto insurance. Its poor roads, high population density in each state, and high crime rates ensure that car insurance premiums are higher than average.

People who opt for limited coverage pay the fifth-highest premium in the nation — $855 a year — to meet the state’s basic needs, according to bankrate.com. New York’s lower limit is the highest at $1,339.

Prices are very high in New York even though most of the state is not urbanized. One reason is that the minimum coverage required in New York and almost every other state is much higher than it is now. New Jersey is one of only four states that requires only $15,000 for personal injuries (and Florida mandates only $10,000). Most states require $25,000 and three require $50,000 worth.

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The appeal of low-cost and low-cost insurance is obvious, and it has some advantages. New Jersey has the fewest uninsured drivers in the country.

A very limited publication, however, is a very good follow-up to no publication at all. The average personal injury claim is $18,000, leaving many accident victims in need of compensation. Most claims are above average, and for those hit by an underinsured driver it is no better than an uninsured driver.

This year legislative leaders decided to end New Jersey’s low-income insurance policy. The need for treatment had not increased in 50 years – ridiculously high due to inflation and high medical costs.

The proposed arrangement was without a $250,000 deductible on the original auto policy. This would make New Jersey five times smaller than any other state and 16 times larger than the previous state.

Needless to say, this would result in a significant increase in insurance rates for nearly half of the state’s drivers, with more than a million of them paying as much as $350 a year. Hard on the family budget when gas is already above $4 a gallon.

After a firestorm of calls from opponents who supported the bill, the screening requirements were significantly revised and the bill quickly passed without discussion as last month ended.

Another bill was abandoned. It would have prevented drivers from using their health insurance as the biggest payer for their injuries, less deductibles on their cars. This was standard consumer advice until health insurers began refusing to cover car accident injuries, often without identifying policyholders. This option is still available at this time, but people need to make sure their health insurance covers their car accident injuries or they will be left with a staggering difference.

The Legislature sent Gov. Phil Murphy’s bill to increase the minimum insurance from the current $15,000 to $25,000 starting next year. The sudden increase could cost at least $35,000 starting in 2026. Insurance company officials say 1.1 million drivers pay about $125 each year.

Next year’s increase is likely to be very small, but appropriate given the current financial burden on low-income families and individuals. A further increase by 2026 seems reasonable, given New Jersey’s dangerous roads, but could be put on hold if fears of a recession hit.

There’s never a good time to raise auto insurance rates, but Congress didn’t have to wait 50 years for a worse time. This left only the most painful political decisions.