Car Insurance in New Jersey vs. Texas: Costs, Laws and Resources


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ByMark Fitzpatrick
ByMark Fitzpatrick

Updated: May 20, 2024

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There are several differences between the car insurance requirements in New Jersey vs. Texas. Both states require property damage coverage, but Texas' minimum limit is higher. Texas also mandates bodily injury coverage, which isn’t necessary for New Jersey. Furthermore, you must have personal injury protection (PIP) coverage in New Jersey, which Texas doesn't require.

MoneyGeek analyzed differences in auto insurance between New Jersey and Texas and determined the cheapest insurers.

Car Insurance Laws in New Jersey vs. Texas

Car insurance laws in Texas require, at minimum, 30/60/25 liability coverage. New Jersey car insurance laws mandate a $5,000 limit for property damage and PIP coverage.

Coverage levels can impact your premiums, but they aren’t the only influencing factor. For example, despite having fewer requirements, a state minimum policy in New Jersey costs $1,018 per year on average, while in Texas, you’ll spend around $665. Insurers evaluate other criteria, including theft rates and population density.

MINIMUM CAR INSURANCE REQUIREMENTS IN NEW JERSEY AND TEXAS

New Jersey Requirements

  • $5,000 property damage liability per accident
  • $1,000 personal injury protection per accident

Texas Requirements

  • $30,000 bodily injury liability per person
  • $60,000 bodily injury liability per person
  • $25,000 property damage liability per person

Car Insurance Resources for New Jersey and Texas

 

MoneyGeek’s study compares auto insurance in New Jersey vs. Texas by analyzing quotes from both states. We determined which companies offer the cheapest rates and best service. We even provide information about getting estimates and comparing quotes.

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MoneyGeek breaks down the differences in auto insurance rates in New Jersey and the cost of auto insurance in Texas due to varying factors.

How Are Car Insurance Laws Enforced in New Jersey and Texas?

New Jersey and Texas have different car insurance laws. New Jersey is a no-fault state, which means all drivers can file a claim with their respective car insurance companies regardless of who was at fault in an accident. This is one reason why car insurance in New Jersey is more expensive.

Texas is a tort state. The driver who causes the accident is liable for costs the other party incurs, including medical bills and property damage.

Cheapest Car Insurance Companies in New Jersey vs. Texas

MoneyGeek compared quotes from various car insurance companies in New Jersey and Texas. Our analysis showed that these companies offer the cheapest rates for state minimum policies on average:

  • Cheapest in New Jersey: GEICO ($499 per year)
  • Cheapest in Texas: Farmers ($420 per year)

The cheapest auto insurance policy in both states comes from different carriers. This shows that a car insurance company may charge differently across states. In fact, while GEICO was the most affordable insurer in New Jersey, it only ranked fifth in Texas.

Cheapest Car Insurance Companies in New Jersey
Company
Annual Rate

1.

GEICO

$499

2.

New Jersey Manufacturers

$769

3.

Allstate

$828

4.

Amica Mutual

$877

5.

Progressive

$879

6.

Travelers

$1,220

7.

Esurance

$1,322

8.

State Farm

$1,362

9.

Mercury

$1,407

Cheapest Car Insurance Companies in Texas
Company
Annual Rate

1.

Farmers

$420

2.

USAA

$424

3.

State Farm

$495

4.

GEICO

$528

5.

AAA

$563

6.

Allstate

$573

7.

Esurance

$656

8.

Nationwide

$678

9.

Mercury

$722

10.

The General

$1,317

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THE CHEAPEST COMPANY FOR YOU MAY DIFFER

GEICO offers the cheapest rates in New Jersey, while Farmers is the most affordable in Texas. for state minimum policies. Keep in mind these are averages. Your premium may vary depending on your age, location, driving history and coverage levels. Regardless, MoneyGeek can help you find the cheapest options.

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Average Cost of Car Insurance in New Jersey vs. Texas

The average cost of auto insurance in New Jersey vs. Texas varies depending on coverage levels.

For state minimum policies, you can purchase coverage in New Jersey for an annual average premium of $1,018. In Texas, you’ll spend roughly $665 per year on this coverage.

Additionally, the cost of full-coverage insurance in Texas is $1,316 per year on average, while you’ll pay an average of $1,674 in New Jersey for the same coverage.

Average Cost of Car Insurance in New Jersey vs. Texas
Driver
New Jersey Annual Premium
Texas Annual Premium

Minimum Coverage

$1,018

$665

Full Coverage

$1,674

$1,316

Adding a Young Driver

$4,172

$3,548

Drivers With a Violation

$2,259

$1,451

Drivers With Poor Credit

$3,413

$2,344

Why Are Car Insurance Rates More Expensive in New Jersey vs. Texas?

Several factors affect car insurance rates, causing costs in one state to be more expensive than in another. Narrowing it to a single element might not be possible.

While New Jersey and Texas are densely populated, our analysis showed that New Jersey has a higher highway density. More vehicles on the road increase the probability of accidents. This increase in risk exposure leads to higher premiums.

Car Insurance Costs by City in New Jersey vs. Texas

Car insurance costs don’t just vary between states. They also differ between cities in the same area.

For example, drivers in Jersey City pay an average of $960 yearly for state minimum coverage. In comparison, a similar policy costs $1,089 annually in Paterson. Both of these cities are in New Jersey.

In Texas, Abilene has the lowest annual average premium at $480, while drivers in Houston pay the highest rate of around $806 annually.

Insurance requirements don’t vary within states, so this is not a contributing factor. Population density is a more likely explanation for the difference in rates.

Car Insurance Costs by City in New Jersey
City
Average Annual Rate

Elizabeth

$1,061

Jersey City

$960

Newark

$1,077

Paterson

$1,089

Car Insurance Costs by City in Texas

Moving Between New Jersey and Texas? What to Know

You need to transfer your driver’s license and registration if you relocate from New Jersey to Texas or vice versa. If your current carrier covers your new state, you don’t have to switch providers if you’re happy with their service. However, your rates may change.

You can also choose to find a new car insurance company. MoneyGeek can help you choose a provider that can match your driving background and needs.

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    Use MoneyGeek’s car insurance calculators for New Jersey and Texas

    If you put your details into MoneyGeek’s New Jersey car insurance calculator, it will give you an estimate of how much your insurance will cost. The car insurance calculator for Texas provides you with similar information as well.

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    Learn about car insurance for high-risk drivers in New Jersey and Texas

    Insurers think you’re riskier to insure if you have violations on your driving record. High-risk drivers typically pay more for car insurance. You need to file an SR-22 in Texas if you have severe traffic violations, such as a DUI.

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    Figure out your options for temporary car insurance in New Jersey and Texas

    Temporary car insurance in New Jersey or in Texas is an excellent option if you are only in the state temporarily. Although auto insurance policies typically last for six months, there are ways to get coverage for less time.

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    If you’re a low-income driver, see if New Jersey or Texas offer car insurance programs

    Drivers on a budget can take advantage of low-income programs if they live in California, Hawaii or New Jersey. Although a similar program doesn’t exist in other states, low-income drivers in Texas can still find cheap options using MoneyGeek’s guide.

FAQs About New Jersey and Texas Car Insurance

There are several differences between laws about car insurance in New Jersey vs. Texas. Here are the most commonly asked questions to help you find the right option for your needs.

How do car insurance laws and requirements differ in New Jersey and Texas?
Are the cheapest car insurance companies different in New Jersey and Texas?

Methodology

To calculate average car insurance rates by company and across New Jersey and Texas, MoneyGeek collaborated with Quadrant Information Services to collect auto insurance quotes from both locations. We used a sample profile for a 40-year-old driver with a clean driving record and minimum coverage unless modified by criteria like coverage level, age, driving offenses and credit score. Learn more about how costs are calculated in our MoneyGeek car insurance methodology.

Minimum car insurance requirements by state were sourced from the Department of Motor Vehicles (DMV) of the respective state.

About Mark Fitzpatrick


Mark Fitzpatrick headshot

Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.


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