Auto insurance rates in New Jersey on the rise

By
Published:

As per the most recent data from the National Association of Insurance Commissioners, the average premiums rates for auto insurance policies in New Jersey has increased over the last few months. The insurance regulators in this state and also the other representatives of this industry place the blame on the increasing cost of availing the personal injury protection plan.

The figures released on Tuesday after the completion of an NAIC study said that the average cost of insurance a personal vehicle in New Jersey has risen from $1,198 to $1,218. The premium for comprehensive auto insurance, collision insurance and liability insurance have also been taken into consideration as a part of this study.

The report of the study conducted by the NAIC clearly states that New Jersey continues to occupy the third spot on the list of states that have high insurance rates. Though a decade ago this state occupied the top spot on the list, today it Louisiana and Washington DC precede it. The increasing prices for PIP insurance which has to reimburse claims for expensive medical treatment, irrespective of the person who caused the accidents, is the prime reason for the increase in auto insurance coverage.

In the year 2003, the auto insurance prices in this state saw a drop because of the many reforms adopted by auto insurance providers. The competition that existed between insurance providers to get as many new customers as possible was also a factor that led to lesser premiums. New Jersey auto insurance premiums to avail the personal injury protection plan are the second highest in the country. As per the data available at the Insurance Information Institute, the cost to avail PIP coverage has increased by 40% over the last 8 years.

Department of Banking and Insurance’s spokesperson, Marshall McKnight, said that the increase in the premiums of the PIP plan was the main reason for overall increase in the average between 2008 and 2009. He also went on to add that in 2010, the average increase was close to 6.5% the prices in 2009.

Currently there are a little over 65 auto insurance providers in New Jersey offering insurance plans for residents of this state. Despite the increasing costs, customers are managing to get discounts on their policies because of the competition. They prefer to get quotes from multiple providers and vary coverage options so they find the insurance at affordable prices.