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Expensive car insurance in New Jersey the sign of a healthy market, experts say

Auto insurance market in New Jersey “healthy” as companies compete

New Jersey auto insurance rates increased an average of 6.86 percent in 2009, the Star-Ledger reported this week.

But, say lawmakers and insurance experts, the rising prices are a sign that the market is healthy. The reason for their optimism? Insurers’ profits – computed using data from the National Association of Insurance Commissioners – were flat in 2008 after rising rapidly in recent years.

As recently as 2007, insurance companies’ profits jumped 10.1 percent. But they flatlined in 2008 – a sign, said Risk Information editor Brian Sullivan to the newspaper, that companies are “competing so hard for customers, they’re charging too little.”

He called the news “exactly what [insurance reformers] want.”

In 2003, New Jersey reformed its auto insurance market, increasing the profit that insurers could have and reducing the amount of time that state officials had to approve rate changes. The reforms, it was hoped, would bring new companies into the Garden State – and that’s exactly what happened.

Drivers looking for increased choice in their car insurance – whether they live in New Jersey or elsewhere – should shop online to save money, experts say.

Learn how easy and convenient shopping for auto insurance can be. Get your free auto insurance quotes today!

Posted: January 12, 2010

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