NorthJersey.com

N.J. Uninsured Driver Numbers Declining

NorthJersey.com — Thursday, June 29, 2006

By RICHARD NEWMAN
STAFF WRITER

Fewer people are driving without insurance in New Jersey, bucking the national trend, a new study suggests.

The Insurance Research Council said Wednesday that the percentage of drivers in New Jersey who are uninsured dipped in 2004 to 9.4 percent, down from more than 13 percent in four of the previous five years.

The state ranked 12th best in 2004, compared with 28th in 2003, and that's a "dramatic'' improvement, said David Corum, an IRC spokesman. Nationwide, the proportion of uninsured motorists has grown to 14.6 percent in 2004 from 12.7 percent in 1999, according to the IRC study.

Industry observers say the findings for New Jersey suggest that state regulatory reforms of 2003, which essentially gave insurers more flexibility in pricing, increased competition and made insurance more available to high-risk drivers.

In 2004, the Internet insurance sales king Geico entered the state after a long absence, and other smaller insurers followed.

Also, in 2003 the state began offering low-cost, bare-bones policies for $365, or "a dollar a day," which provide very little coverage but meet the law's minimum requirements.

Those government policies may have helped bring some uninsured drivers into the ranks of the insured, but increased competition is the most important reason, said Rachael Moore, a spokeswoman for the Insurance Council of New Jersey.

"The reforms are bringing more competition to the state and making different types of policies available. They are helping with availability issues we had," she said.

"Increased competition will go a long way in providing more stable rates and increasing the ease of obtaining coverage," added Manuel Goncalves, a spokesman for Allstate New Jersey Insurance Company.

The decline in uninsured driving in the state "is certainly a good sign," said Phyllis Salowe-Kaye, executive director of the consumer watchdog group New Jersey Citizen Action, which has been fighting for greater access to affordable insurance, especially for lower-income drivers in New Jersey's larger cities.

Mississippi, with an estimated 26 percent, had the biggest percentage of uninsured motorists, followed by Alabama and California, which both had rates of 25 percent.

New England states had the lowest rates, with Maine at 4 percent, and Vermont and Massachusetts at 6 percent. New York's uninsured rate was 7 percent.

The IRC looked at injury claims data from 11 insurers to estimate the percentage of uninsured drivers.

"Even though most states require drivers to maintain insurance, the problem of uninsured motorists persists," said Elizabeth A. Sprinkel, senior vice president of the IRC.

"Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers," she said.

The state Department of Banking and Insurance could not be reached for comment.

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