Is auto-insurance in NJ similar to healthcare?
Feb 28th, 2010 by AutoInsGuy
DavidH asked:
I live in NJ; about 10 years ago auto insurance was prohibitively expensive in this state, and there were very few options. I would hear ads for Geico and other low-cost insurance companies on the radio and TV, and they would always have the disclaimer at the end, “Not available in New Jersey”. Suddenly, that was all over – we had more choices and companies like Geico and State Farm and others were allowed to do business in the state.
I live in NJ; about 10 years ago auto insurance was prohibitively expensive in this state, and there were very few options. I would hear ads for Geico and other low-cost insurance companies on the radio and TV, and they would always have the disclaimer at the end, “Not available in New Jersey”. Suddenly, that was all over – we had more choices and companies like Geico and State Farm and others were allowed to do business in the state.
Along with this choice came lower premiums – low like in 40% of what they used to be.
Was there legislation that was passed (or lifted) that made these choices and this competition possible?
It is my opinion that removing state mandates from health insurance would increase competition and lower premiums, and I think that the NJ Auto Insurance example might be a good comparison, but I don’t know all of the facts. Does anyone know exactly what happened in the Auto Insurance industry, specifically in NJ?
Chad
Yes, that and TORT reform.*
As far as I know premiums in NJ are nearly twice as much as in other parts of the country at an average of $3,380 ( source: )
I think it makes sense for more low cost companies to enter the market but some are avoiding NJ and other places like Florida because of the huge number of claims.