Minimum Requirements

• For any vehicle in New Jersey, the owner must purchase at least a basic insurance policy. Basic policies include $5,000 of property damage liability insurance; $15,000 of personal injury protection insurance per person per accident; and up to $250,000 for permanent injuries. However, these policies don't typically include coverage for accidents with uninsured motorists, bodily injury liability or collision coverage, so most New Jersey drivers choose policies that offer more options.
  
  

Rates

• Auto insurance companies calculate your insurance premiums by estimating your risk for accidents. To calculate this risk, the company may consider your driving record, credit history, years of driving experience, gender, age, marital status, geographic location and vehicle use. If you use your personal vehicle for business purposes, the insurance company may raise your premium because you drive your vehicle more often. It may also raise the rate if you live far away from work.
  
  

Tax Implications

• You typically can't deduct personal vehicle insurance premiums on your income taxes. However, if you also use your vehicle for work, you may be able to deduct a portion of the cost. Either you can deduct a percentage of the total cost of your automobile expenses for the year, or you can deduct a flat amount for each mile you travel for business purposes. If you choose to deduct a percentage of your expenses, you must calculate this percentage by dividing the number of miles you traveled for business by the total miles you traveled during the year.
  
  

Commuting to Work

• If you move closer to work and you use your vehicle for commuting, your insurance premium may decrease. Since the Internal Revenue Service considers the miles you drive during your commute to be "personal use" miles, moving closer to work typically won't affect your tax deductions for automobile expenses.