Auto Insurance
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Creation of a legislative committee to study compulsory automobile insurance is provided in a resolution introduced tonight in the Legislature by Assemblyman Hofsladter, Republican, of New York.
Source : select.nytimes.com
New Jersey Legislators Vote To Overhaul Auto Insurance
Prodded by voter anger over paying the nation’s highest automobile insurance rates, the New Jersey Legislature gave final approval today to a bill that would guarantee a 15 percent reduction in rates for most drivers.
The measure ends months of legislative wrangling over how to lower premiums and appease voters whose frustration with the state’s automobile insurance system nearly cost Gov. Christine Todd Whitman election to a second term last fall. Mrs. Whitman is expected to sign the bill into law on Tuesday.
The bill seeks to reduce costs by limiting frivolous lawsuits and reducing fraudulent claims. It was approved with bipartisan support in both houses. The General Assembly voted 57 to 20 for the bill. The Senate, which approved the measure last month, voted again today, 29 to 5, on a final version that included technical changes.
Although lawmakers described the bill as a sweeping overhaul of the auto insurance system, insurers, trial lawyers and customer advocates argued that the changes would not provide long-term savings for drivers.
Since Governor Whitman and legislators were committed to maintaining the no-fault system, most of the changes involved tinkering with the existing laws. The no-fault system provides medical benefits and lost wages to anyone injured in a car accident.
The measure requires that insurers roll back rates for the vast majority of drivers by 15 percent beginning early next year. Lawmakers estimated that the savings from the legislation would average about $165 a year, lowering the average annual bill to $934 from $1,099.
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Jersey Approves 13.1% Rise In Rates for Auto Insurance
The New Jersey Insurance Commissioner today announced a 13.1 percent increase in automobile insurance premiums for more than 2.2 million of the state’s 4 million motorists.
The New Jersey Insurance Commissioner today announced a 13.1 percent increase in automobile insurance premiums for more than 2.2 million of the state’s 4 million motorists.
The rate increase was announced four days after the State Legislature failed to reach agreement on a package of bills intended to reduce automobile insurance premiums. Auto insurance rates in New Jersey, the nation’s most densely populated state, are among the highest in the nation.
The 13.1 percent increase affects customers of the 28 companies in the Insurance Services Office that had profits of less than 10 percent in 1986, and it will also automatically cover motorists who buy coverage through the Joint Underwriting Association, a state-operated pool that insures about 2 million drivers and that faces a $300 million deficit.
The increase will raise the average premium to $879 from $784. When a $73 surcharge that was placed on all motorists in March is counted, premiums will have risen to an average of $952 at policy renewal time. Future Surcharge
In addition, the Insurance Commissioner, Kenneth D. Merin, said he would rule in about a week on a request for another $97 surcharge to help the Joint Underwriting Association. The pool, created for high-risk drivers, now includes half of the state’s 4 million motorists, including many with good driving records, because insurers have grown reluctant to issue new policies
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DEWEY HOLDS FIRM ON AUTO INSURANCE; Rejects Surety Leaders’ Plan to Replace His Compulsory Liability for Drivers
Governor Dewey stood firm today behind his plan to require liability insurance for all motor vehicle owners in the state after a ninety-minute conference with thirteen insurance leaders who opposed his compulsory program.
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Auto Rates Are a Campaign Issue Again as Insurers Prepare to Leave
Four years ago, James E. McGreevey nearly won the governorship of New Jersey with a campaign that harnessed voter anger over high automobile insurance rates. This time, the rate debate has been muted at best – in part because Mr. McGreevey has chosen to make his Republican opponent, Bret D. Schundler, the main issue, and in part because the Sept. 11 attacks have voters worrying about larger questions of safety and survival.
Yet in a state with some of the highest auto insurance premiums in the country, the issue is never far in the background. And the problems have loomed even larger this year as several big insurers announced they would stop doing business in the state.
The companies, including State Farm and A.I.G., which are among the state’s largest auto insurers, have said that efforts to control rates and profits make it impossible to do business here. They are leaving the market even though the average annual premium of $955 paid by New Jerseyans is well above the national average of $700, according to the Consumer Federation of America.
Mr. Schundler cites that fact as evidence that the system badly needs change. And characteristically, his positions are more sharply drawn than Mr. McGreevey’s.
Mr. Schundler’s principal proposal is to give drivers the option of waiving the right to sue for nonfinancial costs, mainly for pain and suffering, in return for immunity from such suits against themselves.
‘’The Rand Institute found that having the right to sue drives up premiums by 20 to 30 percent,'’ said Bill Guhl, Mr. Schundler’s spokesman. ‘’Giving up the option would still leave a driver free to sue for actual losses, but not for a penalty award.'’
In a statement on Oct. 8, Mr. McGreevey, the mayor of Woodbridge, attributed the high insurance costs to eight years of Republican control in Trenton. He said that New Jersey deserved a governor who was serious about lowering costs for consumers, who would stand up to the insurance industry and would crack down on fraud and abuses.
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Prices for Auto and Home Insurance Are Increasing Sharply
Prices for auto and home insurance have been rising sharply around the country in the last few months as insurers struggle to keep pace with increasing costs, insurance executives and analysts said yesterday.
The two biggest auto and home insurers, State Farm and Allstate, have taken the lead in the price increases, and many smaller companies are following, analysts said.
‘’Both auto and homeowners insurance have lost tremendous amounts of money over the last few years,'’ said Robert P. Hartwig, the chief economist at the Insurance Information Institute, a trade group.
Ronald D. McNeil, a senior vice president for Allstate, told investors at a Banc of America securities conference in New York yesterday that Allstate had increased its prices for auto insurance an average of 8.3 percent in 17 states so far this year. He said Allstate had raised its prices for home insurance by an average of more than 20 percent in 20 states.
State Farm said it was taking similar action. It was not immediately able to provide figures for the increases so far this year. But Richard Luedke, a spokesman, said the increases were significantly larger than those in the previous year, when they averaged 4.6 percent for home insurance and 2.7 percent for auto insurance. The increases were necessary, he said, because ‘’we were paying out more in claims than we were collecting in premiums.'’
J. Robert Hunter, the director of insurance for the Consumer Federation of America, said that profit and loss trends for the insurers indicated a need for an average increase of 4 percent to 8 percent in auto premiums. But he said increases of 20 percent for home insurance were ‘’way out of line.'’
‘’I don’t see anything in the data that would justify an increase of that magnitude,'’ he said.
In some states, the increases are even higher, analysts said. ‘’We’re starting to see increases of 25 percent to 30 percent in a lot of states,'’ said Ira L. Zuckerman at Nutmeg Securities in Fairfield, Conn.
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Insurers, Raising Rates, Plan to Drop Some Lines; INSURANCE RATES BEING INCREASED
Consumers and businesses seeking fire and casualty insurance may soon find some forms of insurance unavailable or (from some companies) extremely expensive in parts of the nation
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Political Briefing; What’s That Noise? It’s That Debate – Again
Remember the auto insurance legislation that Governor Whitman signed into law last May?
The law that was supposed to guarantee a 15 percent rate reduction for most drivers, beginning next April? And quell the noisy debate over insurance, at least until the next gubernatorial election?
Well, the debate was raging again last week in a packed hearing room at the New Jersey State House.
For nearly three hours, one witness after another brought concerns to state lawmakers over regulations that the Whitman administration has drafted to implement the new law.
Most of the complaints were from chiropractors and doctors, some of whom stand to lose big money under the proposed regulations, which are intended to help lower auto insurance rates by eliminating unnecessary medical costs.
The physicians and chiropractors at the hearing warned lawmakers that some accident victims would be denied important diagnostic tests. They argued that the proposed ‘’medical protocols'’ drawn up by state officials would result in some people being deprived of needed medical care.
And they also voiced concern that the state was moving toward imposing managed care on accident victims, an approach that lawmakers had rejected when they first created the law.
‘’These medical protocols are dangerous blueprints for a medical catastrophe to be promulgated on the accident victims of the state of New Jersey,'’ said Steven M. Lomazow, chairman of the protocol committee of the Neurological Association of New Jersey.
More : query.nytimes.com
Political Briefing; What’s That Noise? It’s That Debate – Again
Remember the auto insurance legislation that Governor Whitman signed into law last May?
The law that was supposed to guarantee a 15 percent rate reduction for most drivers, beginning next April? And quell the noisy debate over insurance, at least until the next gubernatorial election?
Well, the debate was raging again last week in a packed hearing room at the New Jersey State House.
For nearly three hours, one witness after another brought concerns to state lawmakers over regulations that the Whitman administration has drafted to implement the new law.
Most of the complaints were from chiropractors and doctors, some of whom stand to lose big money under the proposed regulations, which are intended to help lower auto insurance rates by eliminating unnecessary medical costs.
The physicians and chiropractors at the hearing warned lawmakers that some accident victims would be denied important diagnostic tests. They argued that the proposed ‘’medical protocols'’ drawn up by state officials would result in some people being deprived of needed medical care.
And they also voiced concern that the state was moving toward imposing managed care on accident victims, an approach that lawmakers had rejected when they first created the law.
‘’These medical protocols are dangerous blueprints for a medical catastrophe to be promulgated on the accident victims of the state of New Jersey,'’ said Steven M. Lomazow, chairman of the protocol committee of the Neurological Association of New Jersey.
But the Whitman administration contends that is not going to be the outcome.
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Sentenced for Auto Insurance Fraud
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Source : query.nytimes.com