Jersey Journal

Auto Insurance, A Longtime Joke

Jersey Journal — Monday, November 17, 2008

Jersey Journal Editorials

Did you hear? For only the fourth time since 1992, New Jersey is No. 2 on the list of most-expensive automobile insurance markets in the nation.

We're No. 2! Celebrate!

At least this seems to be the reaction of state Banking and Insurance Department officials and representatives of the insurance industry to New Jersey slipping back a bit behind — not another state — Washington, D.C.

This newspaper sees the latest news about the brutal auto insurance rates as just another punchline for the joke that is statewide insurance reform.

In 2006, New Jersey drivers paid an average premium of $1,152, a dip of 2.8 percent compared with the previous year, according to a recent report by the National Association of Insurance Commissioners. It just so happens that, in the same year, the District of Columbia had the highest average premium, at $1,164.

What is interesting about these figures is that anyone would be hard-pressed to find motor vehicle owners in North Jersey who can say they pay $1,152 in premium rates. Yes, the report discusses averages, but this is not realistic. In the real world, the "average" amount is what Garden Staters pay for six months coverage, and only if it is for one vehicle. If they are paying for two "sets of wheels," they are probably both used — what sellers like to call 'pre-owned.'

More good news: The report said 2006 was the second year in a row the average premium fell compared with the prior year; in 2005, the average New Jersey premium dropped to $1,185, from $1,221 in 2004.

Temper all this "feel-good" information with the fact that New Jersey's average premium is 41 percent higher than the national average, and the two-year downward move here mirrors a national trend.

This newspaper agrees with the assessment by Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action.

"I don't know how being one or two makes a whole lot of difference to the people we see," she said. "They still see their rates very high. Given all other costs and everything else in economy, it's little solace to the people we talk to every day."

Top Top | NJCA in the News | NJCA Homepage