Auto Insurance Eligibility Points in New Jersey

Auto Insurance Eligibility Points in New Jersey

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In 1990, New Jersey passed a law that ultimately tied driver's license points to insurance surcharges. Now car insurance companies use eligibility points to determine whether a policyholder's premiums will increase.

Insurers can use the most recent three years in a policyholder's driving history when calculating their premium. Generally, drivers with more points are seen as riskier and will likely pay more for car insurance. Here's what to know about how car insurance companies measure your risk.

How do eligibility points impact your car insurance?

Eligibility points can impact your car insurance offerings in two major ways. The first is in how much you will have to pay for car insurance coverage. Insurers use eligibility points when calculating your rate, and a higher number of points generally equates to higher premiums.

The points system also influences where you can get insurance. Drivers with fewer than seven eligibility points can shop for insurance on the voluntary market, where insurers choose who they accept or reject based on risk. High-risk drivers can't shop on the voluntary market; instead, they must go to the high-risk PAIP program in New Jersey.

How are eligibility points accumulated?

New, inexperienced drivers automatically start with three eligibility points, often known as inexperience points. One point drops off for every year of driving experience. Because new drivers start off with an initial three points, they're at greater risk of being disqualified from the voluntary market.

If you drive in New Jersey, you should understand how the points system works. Below, we've set up a table of major traffic violations — known as Schedule 1 — and the number of eligibility points they incur.

Violation
Number of points
Driving under the influence of alcohol or drugs9

Racing on the highway

5

Reckless driving

5

Exceeding the maximum speed limit by 15–29 miles per hour

4

Improper passing of a school bus

5

Leaving the scene of an accident

8

Each at-fault accident*

5

*Points for at-fault accidents only accrue once the insurer has made payments of at least $1,000.

Major violations, including DUI and leaving the scene of an accident, will effectively put anyone into a high-risk category.

Because newer drivers start out with three points, they might join the high-risk risk pool after just one conviction of reckless driving, excessive speeding or even passing a school bus.

Minor violations, also known as Schedule 2, will also put points on your record. But the state helps you out a little here. If you cause a car accident but you haven't earned eligibility points in the past three years, any violations worth two or three points on the Schedule 2 list won't count against you. Instead, the insurer will only apply surcharges for violations worth five points.

The following is a list of Schedule 2 violations and the number of points they incur.

Offense

Points

Moving against traffic on the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway

2

Improper passing on the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway

4

Unlawful use of median strip on the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway

2

Operating constructor vehicle in excess of 30 mph

3

Operating motorized bicycle on a restricted highway

2

More than one person on a motorized bike

2

Failure to yield to pedestrian in crosswalk

2

Failure to yield to pedestrian in crosswalk; passing a vehicle yielding to pedestrian in crosswalk

2

Driving through a safety zone

2

Racing on highway

5

Improper action or omission on grades and curves

2

Failure to observe direction of office

2
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