The state-of-the-practice in seismic network reliability assessment of highway bridges often ignores bridge failure correlations imposed by factors such as the network topology, construction methods, and present-day condition of bridges, amongst others. Additionally, aging bridge seismic fragilities are typically determined using historical estimates of deterioration parameters. This research presents a methodology to estimate bridge fragilities using spatially interpolated and updated deterioration parameters from limited instrumented bridges in the network, while incorporating the impacts of overlooked correlation factors in bridge fragility estimates. Simulated samples of correlated bridge failures are used in an enhanced Monte Carlo method to assess bridge network reliability, and the impact of different correlation structures on the network reliability is discussed. The presented methodology aims to provide more realistic estimates of seismic reliability of aging transportation networks and potentially helps network stakeholders to more accurately identify critical bridges for maintenance and retrofit prioritization.