New Jersey Department
|For Immediate Release: June 9, 2004||
For Further Information:: Mary Cozzolino - (609) 292-5064
New Jersey Policyholders are in the Driver's Seat:
Auto Reforms Taking Hold
TRENTON - Drivers are benefiting from the increased competition sparked by the auto insurance reform package that Governor James E. McGreevey signed one year ago, according to an annual report submitted by the Department of Banking and Insurance. The report summarizes the progress of New Jersey's consumer-directed, competitive auto insurance market in just one year, and predicts more good news to come.
"The marketplace that is emerging is one that provides protections and benefits for New Jersey drivers," Governor McGreevey said. "Over the past year, we've cracked down on fraud, reduced the number of uninsured drivers on the roads, and developed creative ways to put downward pressure on rates for drivers."
Since the signing of the reform, insurance carriers are actively competing for New Jersey drivers. To date, policyholders have received over $133 million in rate reductions and special dividends. Companies have also increased their marketing efforts to attract more drivers. New Jersey Manufacturers (NJM) is predicting the release of an additional $38.5 million to policyholders later this year.
"Competition between companies is healthy and is yielding results for New Jersey's drivers," said Banking and Insurance Commissioner Holly C. Bakke. "We are building a marketplace that rewards efficiency and encourages new investments and ultimately provides consumers with choices of coverage and cost."
Over the past year, the Department has met with new companies and retained current carriers in New Jersey. Attracted by these reforms, Mercury General entered the market with an objective to become a major player in New Jersey. Mercury is currently insuring more than 30,000 drivers, bringing more capital into the state and employing more than 250 agents.
"The competitive marketplace
we are creating is also feeding a growing economy, generating more employment
opportunities for agents, and allowing companies to expand in order to cover
more drivers," Commissioner Holly C. Bakke said. "More than 1,200
new agents have been appointed since the insurance reform was signed. This means
more agents are on the streets serving more drivers."
New Jersey has also taken the lead in building a consumer-directed, competitive marketplace by giving drivers the tools they need to make informed choices in regards to their auto insurance. Earlier this year, consumer protection regulations were adopted to provide consumers with three price quotes when shopping for insurance, a Consumer Bill of Rights and a more user-friendly Buyer's Guide to explain coverage choices. As an integral part of the reform initiative, these protections help put consumers in the driver's seat.
New Jersey also established itself as a leader in combating fraud by incorporating the nation's toughest penalties to ensure that additional costs are not imposed on honest drivers. Last year, there were 379 convictions, 109 of whom were sentenced to a total of 194 years in prison. New Jersey is on pace to exceed this amount by the end of this year.
Among the highlights from the report:
The Auto Insurance Report