NJBIZ - 2003 Auto Insurance Reforms Seem to be Paying Off

Industry Report
IT TOOK AWHILE, but New Jersey drivers are finally paying slightly less for auto insurance. The average New Jersey driver paid $1,099 for car insurance last year, compared with $1,167 in 2004 when premiums were at a sixyear high, according to recent data from the state Department of Banking and Insurance.
In addition to rates, the number of complaints has dropped as well. According to the department, consumer complaints on private passenger auto insurance decreased to 2,465 in 2006 from 5,770 in 2003.

Most Popular
Strategic Implementation The Key To Business Success
Approaches To Ethical Decision Making
Strategies To Make Online Job Hunting Worthy
13 Job Interview Mistakes To Avoid
8 Keys To Designing A Sales Comp Plan That Delivers

“Four years ago, many New Jersey drivers could not purchase auto insurance at any price and state insurance regulators were receiving an average of two dozen consumer complaints a day,” said state Assemblyman Lou Greenwald (D-Camden). According to the state’s 2006 Auto Insurance Consumer Information Report that showed a 50 percent decrease in complaints.
“Now the auto insurance marketplace has completely changed,” he added. “Consumer satisfaction is up, more insurance companies have come into the state and prices have actually gone down for some drivers.”
The state enacted sweeping auto insurance reforms four years ago. The following changes have taken hold:
The state pool designed to insure the worst drivers-those unable to obtain insurance anywhere else-has dropped to 61,00 motorists in 2006 from 140,000 in 2003.
The state now has 70 companies offering insurance in New Jersey. In 2002, the year before the reforms kicked in, there were 62 companies represented in the state.
Regulators last year reported New Jersey drivers had saved more than $500 million since the auto insurance reforms took effect.
As part of the reforms, the state created a special policy designed to reduce the number of uninsured drivers.
This limited dollar-a-day policy is available to certain Medic aid-eligible drivers. In addition, the state launched the Auto Insurance Purchasing Planner, an online guide to buying auto insurance policies in New Jersey.
As the state’s auto insurance industry becomes more competitive, companies are working to make their policies more competitive. The report found that state drivers received $320,43,209 in rate reductions and dividends last year, compared with $45,965,384 in 2003.
Last November, Trenton-based New Jersey Manufacturers (NJM), said that it would return $69.9 million to 387,000 New Jersey and 8,000 Pennsylvania policyholders.
The checks averaged $176, says the company.
E-mail to news@njbiz.com
Copyright Journal Publications Inc. Jul 9, 2007
Provided by ProQuest Information and Learning Company. All rights Reserved