26 Jun Why is my car insurance so expensive?

Q. After receiving my automobile 2026 policy renewal for two 20-year-old vehicles (2003, 2006), I made a line item review. I am familiar with increased deductibles and collision coverage choices as a means to reduce costs. What bothers me is the uninsured and underinsured charges that are added into the policy as a mandated state rule. These charges are approaching 14% to 16% of the total annual premium for me. New Jersey says these charges protect the policyholder, yet MVC issues a vehicle registration and license to minimally conforming registrants. This seems like a penalty to policy owners worried about liability, who may even carry umbrella policies for added litigation protection. Is this fair? What are the alternatives? Do all U.S. states do the same thing?
— Driver

A. It seems you have coverage well above the minimum, and that’s likely where your uninsured and underinsured motorist cost comes in.

In New Jersey, uninsured and underinsured motorist coverage is required on standard auto insurance policies, but it is not required for all drivers.

The state also allows a cheaper “basic” policy that does not include this protection at all, so not every driver on the road carries it.

The law requires insurers to offer coverage equal to your liability limits, which is why many policies default to higher protection levels. That increases the cost, especially when you carry strong liability coverage or an umbrella policy.

These charges can make up a significant portion of a premium, particularly on older vehicles like yours where coverage for damage to the car is relatively low compared to coverage for injuries.

You can ask your insurer about lower, though you typically must request this in writing. You could also switch to a basic policy, but that would leave you with no protection if you’re hit by an uninsured or underinsured driver.

Is it fair? We can say for sure that New Jersey allows some drivers to carry very limited coverage, while requiring others to carry protection against them, so it feels like responsible drivers are paying for risks created by less‑insured drivers.

Call your insurer and ask about your options. Just remember that while lower coverage will mean a lower cost, you could regret it if there’s ever a serious accident.

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This story was originally published in June 2026. 

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.