Auto Coverage Choices Dwindle in N.J.

NU Online News Service, Dec. 30, 3:30 p.m.EST?In addition to some 25 auto insurers that have leftNew Jersey during the past 10 years, seven more insurers haveeither left or announced plans to stop doing business in the statethis year, according to the Coalition for Auto InsuranceCompetition in Newark, N.J.

"Drivers are facing the ugly truth about auto insurance in NewJersey," Coalition Chairman John Friedman said. "Excessiveregulation and political interference is forcing auto insurers toflee New Jersey, leaving drivers with little choice and fewoptions."

Each month, more than 4,000 policyholders in the state learnthat their auto insurance coverage is not being renewed, theCoalition stated, prompting them to look for new coverage in amarket that lacks adequate choice and competition.

Currently, there are some 60 auto insurers operating in NewJersey, a third fewer than neighboring New York andPennsylvania.

The Coalition argued that much of the blame lies with NewJersey's excessive regulation of auto insurance. Mr. Friedman saidthat without swift action by state lawmakers, consumers will likelyface fewer choices in 2003 as excessive regulations and politicalinfluence continues to take its toll.

"Drivers need a regulatory system that promotes competition,encourages companies to sell auto insurance in New Jersey, andcreates a stable market that offers more choices for consumers,"Mr. Friedman said. "Until reforms are made that promote greaterconsumer choice and industry competition, insurers will continue tolack the incentive to grow and invest capital in New Jersey,leaving drivers in a lurch."

The following is a listing of auto insurers that have eitherleft or announced plans this year to stop doing business in NewJersey:

? In January, Harleysville Insurance Company in Harleysville,Pa., agreed to pay Summit, N.J.-based Palisades Safety andInsurance Association and Palisades Insurance Company $4.7 millionto take the 16,000 vehicles Harleysville insures.

? In June, New Jersy state officials approved State FarmIndemnity's request to withdraw from the state. In September, StateFarm Indemnity, part of State Farm Insurance Companies inBloomington, Ill., started non-renewing 96,000 New Jersey autopolicies as part of its withdrawal.

? Twin City Fire Insurance Company, part of The HartfordFinancial Services Group in Hartford, Conn., agreed in September topay Palisades Safety & Insurance Association and PalisadesInsurance Company $9.2 million to take the 24,000 vehicles itinsures in New Jersey.

? Cincinnati, Ohio-based Great American Insurance Company agreedin September to pay Palisades Safety & Insurance Associationand Palisades Insurance Company $7.0 million to take the 24,000vehicles it insurers in the state.

? The Robert Plan in Bethpage, N.Y., closed its New Jerseybusiness this month, non-renewing its last 20,000 vehicles througha Department of Banking and Insurance-ordered "solventrun-off."

? Central Mutual Insurance Company in Van Wert, Ohio, andMerchants Insurance Group in Buffalo, N.Y., also announced thismonth they will stop doing business in New Jersey.