Greenwald: 2003 Auto Insurance Reform Law Continues to Yield Dividends for Drivers

GREENWALD: 2003 AUTO INSURANCE REFORM LAW CONTINUES TO YIELD DIVIDENDS FOR DRIVERS

Consumer Complaints Have Dropped 50 Percent over Last Four Years

(TRENTON) - A dramatic reduction in the number of consumer complaints about auto insurance is the latest evidence of how New Jersey motorists continue to reap benefits from the sweeping auto insurance reforms law that was enacted four years ago, Assemblyman Lou Greenwald said today.

Greenwald (D-Voorhees), who crafted the landmark reform measure, said the recently released 2006 Auto Insurance Consumer Information Report shows a 50-percent drop in complaints about New Jersey's motor vehicle insurance system - from more than 6,000 complaints in 2003 to around 3,035 complaints in 2006.

"Four years ago, many New Jersey drivers could not purchase auto insurance at any price and state insurance regulators were receiving an average of two dozen consumer complaints a day," said Greenwald.  "Now the auto insurance marketplace has completely changed.  Consumer satisfaction is up, more insurance companies have come into the state, and prices have actually gone down for some drivers."

Greenwald said the reform law has worked wonders in practically every facet of the auto insurance marketplace.

"It has been a huge success," he said.

The New Jersey Automobile Insurance Competition and Choice Act was one of the centerpiece reforms enacted by the Democratic-controlled Legislature in 2003.  The reform measure streamlined a regulatory system that had become burdensome and counterproductive.

In the decade prior to the June 2003 enactment of the reform legislation, over 40 automobile insurance carriers had left the state, with even more threatening to leave, citing prohibitive government regulation of the industry.

Under the reform act, New Jersey drivers were given the keys to a new auto insurance regulatory system that imposed the toughest penalties in the nation for insurance fraud, expanded consumer protections, and initiated innovative methods for reducing the ranks of the uninsured.

Under the new rules, two of the most competitive national auto insurance firms, Progressive Insurance and GEICO have begun selling insurance in the state.  Since 2003, 17 new auto insurance companies - including companies like Mercury General, Esurance, and American Express - have entered New Jersey's insurance market.

"We have put a decisive end to three decades of insurance underwriting companies fleeing the state, and we are actually seeing new companies vying to do business in New Jersey," said Greenwald.  "This coupled with reduced rates for New Jersey motorists, signals that our state's insurance market is fully recovered and back on a competitive track."

Greenwald cited a range of evidence that the reforms have taken hold, including:

• The state pool designed to insure the worst drivers - unable to obtain insurance anywhere else - has dropped from 140,000 motorist in 2003 to 61,00 in 2006.
• Auto insurance has almost fallen off the charts as a pocketbook concern of New Jersey residents, according to public opinion polls.
• The state now has 70 companies offering insurance in New Jersey.
• Regulators last year reported New Jersey drivers have saved more than $500 million since the auto insurance reforms took effect.

Greenwald said motorists who shop around can maximize savings in their auto insurance bills.  The DOBI has pricing tips and examples on the Web at www.state.nj.us/dobi/filings.htm and the Insurance Council of New Jersey has further information for motorists on most of the state's auto insurance companies at www.icnj.org.

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