Auto insurance rates in NJ are steadily rising again, after years of steadily declining rates. To add to that the Christie administration is now proposing fresh rules that would put restrictions on the type of medical care that would be offered to injured motorists, under their policy cover.
The new rules that have now been proposed could reignite the raging debate over car insurance, an issue that has dominated NJ for years, as enraged motorists had regularly opposed the new rates stating that they were among the highest in the nation.
Now, the old fight over who rules in case of disputes over injured drivers is going to be raked up again due to the proposal made by the administration. Auto insurance companies have sought the proposed changes for a long time now and are stating that they will reduce premiums. However, consumer advocates today have stated that it will hurt accident victims.
The auto insurance bills in NJ have gotten smaller between 2005 and 2008 after the former Governor James E. McGreevey deregulated the auto insurance market. During 2008, NJ was at the third position, at $1,081 per car.
However, state officials claim that the rates started rising again during 2009, and have continued to do so.
Marshall McKnight, Department of Banking and Insurance spokesman had stated that the vast majority of insurers in the state had sought increases. However, McKnight was unsure about the rise in rates and their averages, but added that the insurance companies were not bound by the law to make any disclosures regarding the hike in rates if the hike does not go over 7% per annum.
According to the proposed rules, there would be limits on the PIP cover, which offers coverage against medical costs for the injured victims. McKnight states that rise in auto insurance costs since the last two years have largely been due to the rise in medical costs. This is the major reason for the hikes he said.
Nearly all the motorists in NJ had the PIP coverage of $250,000 stated McKnight, whereas the national average is close to $5,000. This makes auto insurance in NJ far more expensive when compared to the rest of the nation.
However, these changes are likely to hurt motorists, according to Phyllis Salowe-Kaye, the director of New Jersey Citizen Action. She claimed that the customers would be hit by this as this is another kind of taxation.
