Geico To Announce Cut In NJ Rates

NJ.com — Wednesday, August 8, 2007

By Joe Donohue

Geico plans to reduce its New Jersey auto insurance rates an average of 4.1 percent or about $81 per policyholder, company officials have confirmed, a move that could further grow its business in a state it once shunned.

State officials say other companies also have reduced rates in recent months – evidence, they say, of the success of four-year-old legislation that eased state regulation of the auto insurance industry.

Geico returned to the state three years ago after a 28-year absence, and now covers about 606,000 vehicles through three subsidiaries, ranking third in the market behind New Jersey Manufacturers and Allstate.

Steve Cunningham, assistance vice president and general manager of Geico's northeast operations, said its rate changes take effect today for new policyholders, and Sept. 24 for renewal policies. "We're glad we can provide our policyholders with even more savings, and we hope to attract new customers with our lower rates," Cunningham said.

Eve Weissman, an analyst with New Jersey Citizen Action, said consumer advocates are not happy with some of the results of the changes in insurance regulations – including the use by Geico and other companies of credit histories, occupation and education as rate-setting factors.

"The real question is who are rates being lowered for?" said Weissman.

Assemblyman Louis Greenwald (D-Camden), a co-sponsor of the 2003 reforms, said with today's healthier market, consumers can seek coverage from other companies that don't use those factors. New Jersey Manufacturers said it has been selling insurance to many Geico defectors in recent months.

Top Top | NJCA Homepage | NJCA in the News