GREENWALD: LATEST RATE REDUCTION FURTHER EVIDENCE OF 2003 AUTO INSURANCE REFORM SUCCESS

         (VOORHEES TWP.) – Assemblyman Louis D. Greenwald today cited New Jersey Manufacturers Insurance Co.’s proposed 5 percent average rate reduction as further evidence of how the state’s sweeping 2003 auto insurance reform law is working for New Jersey drivers.

            NJM announced yesterday that it would be reducing rates for most policyholders starting Friday. The company, which insures more than 740,000 vehicles, said its policyholders will save approximately $34.6 million in just the first year.

          “A savings of 5 percent is significant to the hard-working families of New Jersey at a time when all other costs keep rising,” said Greenwald (D-Camden), who was the prime sponsor of the reform law. “New Jersey Manufacturers’ premium reduction is the latest evidence that the 2003 reform law is working as intended.”

         In addition to the NJM rate decrease, State Farm Indemnity cut rates 2.9 percent in 2007, while Founds Insurance dropped its rates 2.9 percent and Hanover decreased its premiums 5 percent last year, according to the state Department of Banking and Insurance.

           Annual auto insurance rates declined to an average of $1,099 in 2006, the latest year statistics are available.

           “In the nearly five years since the reform law was enacted, New Jersey motorists have more carriers to chose from and enjoy lower rates at the same time that claims and auto insurance fraud are on the decline,” said Greenwald. “This is a prime example of how government and business can work together to find solutions that benefit most New Jerseyans.”

          The New Jersey Automobile Insurance Competition and Choice Act was one of the centerpiece reforms enacted by the Democratic-controlled Legislature in 2003.  The reform measure streamlined a regulatory system that had become burdensome and counterproductive.

          In the decade prior to the June 2003 enactment of the reform legislation, more than 40 automobile insurance carriers had left the state, with even more threatening to leave, citing prohibitive government regulation of the industry.

           Under the reform act, New Jersey drivers were given the keys to a new auto insurance regulatory system that imposed the toughest penalties in the nation for insurance fraud, expanded consumer protections, and initiated innovative methods for reducing the ranks of the uninsured.       

Contact:

Assemblyman Greenwald

(856) 435-1247