Auto Insurance
1.3 Million New Jersey Drivers To Pay More for Auto Insurance
Automobile insurance rates will rise for 1.3 million New Jersey drivers as a result of recent settlements between state regulators and insurers, including in some cases a revamping of systems that vary rates according to drivers’ records.
The State Department of Banking and Insurance said this week that starting in January, premiums would rise by an average of 6 percent for 464,000 policyholders with Liberty Mutual Fire Company, and by 8.9 percent for 65,000 drivers insured by its affiliate, Liberty Insurance. The announcement comes two weeks after a settlement with State Farm Insurance that will mean an average premium increase of 14.5 percent for more than 800,000 drivers, and up to 90 percent for those with the worst driving records.
The settlements stem from lawsuits the companies brought against the state after their requests for steeper increases were rejected by the insurance department last year. The requests followed a mandatory 15-percent rollback of insurance premiums imposed by legislators and Gov. Christie Whitman in 1999.
Several companies, including State Farm, have said they plan to pull out of the New Jersey market, which the industry says is the most heavily regulated and highly politicized in the country.
Last year, Liberty Mutual unsuccessfully sought a 20 percent increase and Liberty, 25.2 percent. State Farm requested a 16.8 percent increase. Eight other companies are also seeking increases.
Under the settlements, all State Farm customers will pay 7 percent more. But the remaining 7.5 percent of the increase granted by the state will result from a revamping of the company’s six-tier system that will place many drivers into higher-paying tiers based on their driving records. For drivers bumped from the fourth tier to the second, for example, rates will jump 90 percent.
More : query.nytimes.com
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