Tae-Nyun Kim, Associate Professor of Finance, was featured as an expert in a recent article on WalletHub discussing the “Best Car Insurance in New Jersey.”
Why are car insurance prices so different from state to state?
Car insurance prices vary significantly from state to state due to factors related to state laws, demographics, and environmental considerations. Each state sets its own minimum insurance requirements, which affect the cost. States with high minimum coverage requirements often have higher insurance premiums, while those with lower standards may offer cheaper rates. States with densely populated cities or high traffic levels usually experience more accidents, which raises insurance costs. For instance, states with larger metropolitan areas (e.g., California or New Jersey) generally have higher premium rates because of the increased risk of collisions. Furthermore, in states with a higher percentage of uninsured drivers, insurers raise premiums to account for the risk of covering accidents involving these drivers.
What is the best way to save on car insurance?
First, you should compare quotes regularly, even when satisfied with your current insurance policy. Rates and discounts vary widely across providers, so comparing quotes from multiple companies can help you find the best deal. You may find significant differences even for the same coverage, especially if your driving profile has changed recently. Upon changing your car insurance provider, you should check if the company offers any discounts that apply to you. Discounts vary by insurer, but common ones include safe driver discounts, multi-car discounts, low mileage discounts, specific membership discounts, etc. Also, maintaining a good credit score can help reduce your insurance premium, as it is one of the factors considered in insurance premium estimation models. Most of all, you need to drive safely and avoid claims. A clean driving record over time can result in lower premiums.