Auto Insurance

Truth About Auto Insurance

Like their counterparts in California, New Jersey drivers are fed up with soaring auto insurance bills and won’t let state officials rest until they’ve done something about it. Even so, Governor Kean’s latest proposal to placate angry drivers is a non-starter, at best puckish and at worst irresponsible.

The truth is that there’s only one realistic way to reduce premiums soon: cut services provided by insurers. One expensive service that few New Jerseyans (other than claimants’ lawyers) would miss is the right to collect damages in court.

There’s no great mystery as to why average insurance rates in New Jersey are $1,000 and climbing rapidly. The state has the second-highest number of accidents per mile driven and the fourth-highest theft rate. It also has the second-highest per capita income, which is reflected in higher medical and auto repair costs. Moreover, since 1973, New Jersey has required insurers to cover all medical expenses in accidents, no matter who was at fault.

Pressed to do something about rates, the state capped premiums for all drivers with good driving records. Insurance companies responded by refusing to cover most young drivers and residents of densely populated, high-risk areas - fully half the drivers in the state.

More : query.nytimes.com

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