New Jersey has the highest auto insurance rates in the nation, according to a report by the National Association of Insurance Commissioners (NAIC).
The NAIC is a regulatory support organization that was created by chief insurance regulators from all 50 US states. The organization collects data on insurance rates, including auto insurance rates, throughout the nation and releases the statistics in the hopes of providing lawmakers and regulators with the information they need to create sound policies.
The most recent annual report released by the NAIC covers motor vehicle insurance policies from 2012, which is the latest year for which car insurance policy numbers are available. The report indicates that NJ drivers paid an average of $1,220 for auto insurance in 2012.
Not surprisingly, car insurance premiums are also expensive in neighboring New York, where drivers pay an average of $1,152 for auto insurance each year. The District of Columbia also ranked high on the list, with D.C. drivers paying an average of $1,155 for car insurance. Anyone looking to cut their auto insurance premiums in half would do well to move to Idaho, where annual rates average just $535.
The national average for car insurance is $815, which means that New Jersey drivers pay nearly 50 percent more than drivers in other states. Moreover, this doesn’t figure to end anytime soon. One major reason is that New Jersey is densely populated, which results in more congested roads and highways, as well as more auto accidents.
Another reason for high auto insurance rates in New Jersey is state laws that require mandatory coverage. Marshall McKnight, a spokesman for the New Jersey Department of Banking and Insurance, which regulates the NJ banking, insurance and real estate industries, observed that NJ drivers have to pay particularly high premiums: the average mandatory liability premium was $861 in 2012, a figure that represented the highest mandatory premium coverage in the US.
Beyond that, many drivers in New Jersey elect to get more coverage than they are legally required to carry. According to McKnight, approximately 70 percent of NJ drivers choose to have the maximum personal injury protection in the event of a car accident.
Although NJ lawmakers would surely like to do something to alleviate the cost of auto insurance for Garden State residents, the reality is that anyone who resides in New Jersey and drives a car is going to be subject to significant costs. This is the third straight year that New Jersey has appeared at the top of the annual list of states with the highest auto insurance costs.
The high auto insurance rates in New Jersey have been a major source of contention for lawmakers and residents. Given the recent trend in rising car insurance premiums, this could become a much larger problem in the future.
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