Auto Insurance
Pages (30) : « First ... « 1 2 3 4 5 6 7 8 9 10 11 12 [13] 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 » ... Last »JERSEY REVISES AUTO INSURANCE; ‘ 65 Rates to Rise by 9.7%, but Reclassification Will Cut Costs for Thousands JERSEY REVISES AUTO INSURANCE
A sweeping reclassification of New Jersey drivers will give substantial reductions in automobile insurance rates to thousands next year despite a 9.7 per cent average rise in premiums that was approved today
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Poll Findings Hint at Trouble For Whitman Over Insurance
Most New Jersey voters say that neither they nor the state have benefited from Gov. Christine Todd Whitman’s income tax cuts, and now, seven weeks before Election Day, they give her low marks on the issue that they continue to cite as the state’s biggest problem: the cost of auto insurance.
These results of a New York Times/CBS News poll underline the volatile nature of the New Jersey electorate, a group whose members overwhelmingly say they have no opinion of Mrs. Whitman’s Democratic opponent for governor, State Senator James E. McGreevey, but who also tell poll takers that Mr. McGreevey is more likely than the Governor to bring down automobile insurance premiums.
Sixty-seven percent of those surveyed said they disapproved of the way that Governor Whitman has handled auto insurance rates, which are more expensive in New Jersey than in any other state. Asked which candidate is more likely to bring down those rates, 36 percent cited Mr. McGreevey while 25 percent chose Mrs. Whitman.
Mrs. Whitman’s promise to cut income tax rates by 30 percent jump-started her 1993 campaign that ousted Gov. Jim Florio, and when she kept that promise a year ahead of time, she stood in the national spotlight. But as the fall campaign begins, almost half of New Jersey residents surveyed said they did not think the tax cut made much of a difference to the state. Asked what impact the income tax cut had on their own lives, two-thirds of those polled said that cut had not made much difference. Only 18 percent described the tax cut as good, nearly matched by the 13 percent who said it had been bad for them personally.
‘’What this poll says to me is that she has a real race on her hands,'’ said Larry J. Sabato, a professor of government at the University of Virginia. ‘’This is not the coronation that people expected a year ago.'’
Auto insurance has dominated the campaign debate all summer. Forty percent of the 901 New Jersey residents polled from last Thursday to Sunday cited auto insurance as the single most important issue that they wanted the next governor to address.
The next issues cited as problems were education (by 13 percent) and property taxes (by 11 percent). Democrats are working to persuade voters that local property taxes have increased as a result of the state income tax cut, and the poll shows their arguments may find fertile ground. Asked how Governor Whitman is handling property taxes, 53 percent said they disapproved while 24 percent approved of what she is doing. The margin of error in the poll is plus or minus 3 percentage points.
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Finds Company Cut Rates on Auto Insurance; V an Schaick Absolves Another Accused Concern
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BAY STATE ANNOYED WITH LEGISLATURE; Special Session to Obtain Lower Auto Insurance Rates Got Nowhere in Seven Weeks. MEMBERS GOT $123,000 Protest Over High Cost, Developments Showed, Was Confined to Boston Region. Protest Was Regional. Sessions Were Mild.
-The General Court adjourned a few days ago after a special session in which nothing was done. The Governor called the session because in the language of his proclamation “the welfare of the people demands that legislative action be taken” to obtain lower automobile … [
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2 Candidates, Different Plans
IN most states, voters consider a politician’s position on education, taxes or the economy when they go to the polls. But not in New Jersey this year. According to recent polls, voters have auto insurance on their minds.
While both of the two leading candidates for governor have promised to help motorists agonizing over their high premiums, their approaches are miles apart.
Governor Whitman, a Republican, wants to lower premiums by limiting the number of lawsuits that can be filed after an accident, and by reducing legal fees and excessive medical bills – some of the main causes of the state’s high rates.
Under Mrs. Whitman’s proposal, drivers could choose between several plans that would allow them to save between 5 percent and 25 percent of their premiums. The most savings would go to those motorists who gave up their right to sue for pain and suffering. Such damages exist over and above the cost of medical bills and lost wages, which would be covered.
The Governor’s Democratic rival, State Senator James E. McGreevey, who is also Mayor of Woodbridge, says that as governor, he would order insurance companies to reduce rates for all drivers by 10 percent. Unlike Mrs. Whitman, Mr. McGreevey says that all drivers would get lower rates without giving up their rights to sue.
Mr. McGreevey says that the across-the-board rate cut would force insurance companies to crack down on fraud, which insurance regulators estimate could be inflating premiums by as much as 20 percent. But several experts who have reviewed Mr. McGreevey’s proposed rate reduction say that it could be struck down by the courts if the insurance companies were able to prove that it hurt their ability to earn a fair profit.
Mrs. Whitman’s plan to limit lawsuits is not without its own problem: It is unclear whether it could ever become law. Her proposal faces fierce opposition from the state’s trial lawyers, who have widespread support among state legislators, many of whom are lawyers themselves.
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McGreevey Signs Law Easing the Rules for Auto Insurers
After campaigning for years about the need to lower New Jersey’s steep auto insurance premiums, Gov. James E. McGreevey signed a bill into law today that is intended to ease regulations on auto insurers and, eventually, to provide modest rate reductions to some drivers.
Since 1997, more than 20 insurance companies have stopped writing policies in New Jersey, saying that the state’s maze of regulations made it an unprofitable market. In recent years, the dwindling competition has led to exorbitant rates and made it difficult for thousands of motorists, even those with good driving records, to get policies.
The law signed by Mr. McGreevey seeks to lure insurers back to the state by phasing out a provision that forced insurance carriers to write policies for drivers with bad records and by adding tougher and more strictly enforced insurance fraud regulations.
The new plan would also bring slight reductions for good drivers and significant increases for motorists with troubled driving records.
The governor’s plan does not include an automatic rollback of rates, a fact that led many legislators to criticize it as favoring insurers. But as he signed the bill today, Mr. McGreevey said he was confident that it was a first step toward rebuilding the market and would ultimately drive down rates by giving consumers more insurers to choose from.
‘’We are correcting 30 years of rules that hurt the very drivers they were supposed to protect,'’ Mr. McGreevey said in a news conference overlooking a highway outside the State House.
The ceremony today was a milestone in Mr. McGreevey’s political career. In 1997, as the little-known mayor of Woodbridge, he nearly toppled Gov. Christine Todd Whitman by harnessing voter discontent about the state’s high auto insurance premiums, and the issue remained near the center of his successful campaign four years later.
But the absence of rate reductions for most drivers left many lawmakers marveling at the contrast between Mr. McGreevey’s ambitious campaign rhetoric and the limited impact of the new law.
‘’This is not going to solve the problem that people are most concerned about – high rates,'’ said Senator Diane B. Allen, Republican of Burlington. ‘’People’s rates are going to go up. So I am particularly concerned with the fact that we’re piddling around the edges. We need to throw out the system we have and rebuild it.'’
Mr. McGreevey and other Democrats tried to deflect those criticisms by saying that their plan was a responsible attempt to mediate between the insurance business and consumers and to use market forces, rather than government regulations, to ease the problem. The administration has argued that an automatic rollback would be a politically popular quick fix that would probably drive more insurance companies to flee the state.
Instead, Mr. McGreevey’s plan was devised to lure insurers back to the state while including several consumer protection measures, including a requirement that insurance agents offer drivers at least three different coverage plans, and a ‘’dollar-a-day'’ medical policy for low-income drivers.
‘’The auto insurance market in New Jersey has far more wrong with it than just high insurance rates,'’ said Senator Ronald L. Rice, a Democrat from Newark.
Most major auto insurance organizations – including the Alliance of American Insurers, the Insurance Council of New Jersey and the Professional Insurance Agents of New Jersey – supported the plan, and several industry lobbyists were on hand as Mr. McGreevey signed it into law.
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Auto Insurance Barred to Many as Companies Seek to Cut Losses
Following is the second of three articles on automobile casualty insurance.
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Whitman Freezes Accident Claims and Chooses an Insurance Chief
As Gov. Christine Todd Whitman introduced her choice for New Jersey Insurance Commissioner today, she gave thousands of state motorists some bad news: their auto insurance claims will not be paid any time soon.
Governor Whitman declared a freeze on paying accident claims to drivers insured by the state-run Market Transition Facility until state officials can find the money. There are about 100,000 motorists and $900 million in claims affected by Governor Whitman’s emergency order.
“This is only a deferral, all the claims will eventually be paid,” the Governor said. “And a system will be established to pay claims to motorists for whom a delay would present a hardship.” Governor Whitman said it had not yet been determined how motorists could qualify for hardship claims.
But the Governor’s announcement meant that, within minutes of his introduction, Drew Karpinski found himself fielding questions about a crisis created during the last two years of the Florio administration.
Mr. Karpinski, a Peapack-Gladstone resident and an insurance agent for nearly 30 years, was a co-founder and former president of Burkar Associates Inc., an insurance agency in Parsippany. Mr. Karpinski, 53, who is still a principal in Burkar, said he has begun the process of divesting himself from active control of his assets in the company. He said he will have no problem regulating companies for whom he once wrote policies. He is to be paid $100,225 a year.
Mr. Karpinski, who must still be confirmed by the Senate, said his first task will be to meet with insurance industry representatives to find some way to pay the accident claims of the motorists in the Market Transition Facility.
The facility was created in 1990 to succeed the deficit-ridden Joint Underwriting Association, another state-run auto insurance system that was supposed to hold down insurance costs for motorists unable to buy policies on the open market. The law creating the facility required insurance companies to meet a series of quotas, which were designed to gradually reduce the number of drivers unable to buy coverage on the voluntary market because of poor driving records or other factors.
The Joint Underwriting Association went bankrupt three years ago and has been assessing insurance companies a surcharge to pay its debts. But the Florio administration ignored warnings from its own financial experts that it had to increase premiums for the MTF by 63 percent to keep it solvent.
The MTF continued to run up a deficit until last December, when the state insurance department issued a “cash call” to auto insurers to come up with $217 million to keep the MTF afloat.
The insurance companies went to court and won approval to keep the money in an escrow account instead of turning it over to the state while its challenge to the cash call is being resolved. The New Jersey Supreme Court last week upheld the escrow arrangement, so the state has no money to pay claims.
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Auto Rates Are Still High; Leslie Hyatt Is Still Angry
Leslie Hyatt is not happy. Ms. Hyatt is the 26-year-old secretary from New Brunswick who led a protest outside the State House this spring that attracted more than 500 angry drivers, demanding that Governor Whitman and the Legislature lower auto insurance costs or risk their wrath at the polls.
Since the new auto-insurance legislation that Governor Whitman signed into law last week will not reduce insurance rates, Ms. Hyatt said the Governor and lawmakers had lost her vote in November. She also pointed out that about 135,000 New Jerseyans signed petitions that she has gathered, also pledging not to support the Governor or lawmakers who failed to reduce rates by the fall.
‘’It’s no good,'’ Ms. Hyatt said of the new law, whose sponsors in the Legislature acknowledge that it will not lower rates at all. ‘’All people were asking for is a break. They are not doing right by the people. It is so disheartening because so many people have cried out for help and they have completely ignored it.'’
Ms. Hyatt, whose foray into politics came late last year when she opened up her insurance bill and became outraged over her own high rates, is still gathering signatures for her petitions with the help of a Trenton-based radio station.
She said she had been hopeful earlier in the year, when the Governor made auto insurance the top priority in her State of the State address to the Legislature and vowed to cut rates by up to 25 percent.
‘’Make no mistake,'’ Mrs. Whitman told lawmakers in January. ‘’Enacting true auto-insurance reform will not be easy. Powerful special interests are already mobilizing to preserve the status quo. But if they want a fight, we’ll give it to them.'’
But on April 22, the day before Ms. Hyatt and her fellow demonstrators descended on the State House, the Governor had already backed away from trying to win legislative approval for much of her plan. Lawmakers signaled that they would not support the bill’s major cost-saving component: giving consumers if they agreed to give up the right to sue for pain and suffering if they were injured.
Instead, she announced a deal with Republican leaders to move on legislation that would end surcharges and automatic rate increases, as well as combat fraud.
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Anger Over Car Insurance Rates in Canada
Canada’s auto insurers, squeezed by soaring injury claims, falling investment income and slow-moving regulators, are hitting drivers with huge increases in premiums.
The public outcry has led politicians across the country to promise mandatory cuts in premiums and other reforms. That has left insurance executives wondering whether their industry, already flooded with red ink, will be the chief casualty, or whether their long campaign for regulatory change is finally paying off.
Michael Donoghue, chief executive of the Allstate Insurance Company of Canada, a unit of the Allstate Corporation of Northbrook, Ill., said that while his company ‘’had posted disastrous results in seven of the last eight quarters,'’ he was encouraged by the current furor.
‘’It seems like it had to become a political issue before the governments wanted to do anything,'’ Mr. Donoghue said. ‘’I see a good understanding of the issues.'’
But George Cooke, chief executive of the Dominion of Canada General Insurance Company in Toronto, expressed concern that with American- and European-controlled companies writing about two-thirds of auto insurance policies in Canada, heavy underwriting losses and political pressures could discourage foreign investment.
According to Mr. Cooke, many foreign-controlled companies ‘’have a for-sale sign up, either in neon lights or in invisible ink.'’
There has already been considerable consolidation. According to the Insurance Bureau of Canada, a trade group, 37 property and casualty companies have merged, sold or closed their Canadian operations since 1998; the number of active companies has fallen to 207 from 231.
As in the United States, auto insurance rules are a patchwork in Canada. Each of the 10 provinces draws up its own regulations, trying to balance the interests of consumers, insurance companies, lawyers and health care providers, among others.
In three provinces, government corporations have a monopoly on basic coverage, with private insurers selling only optional supplementary benefits. Six other provinces, including Ontario, have privately run systems, where insurance companies compete for business. Quebec has a hybrid system.
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