Auto insurance coverage rates on the rise in New Jersey
Auto insurance rates in New Jersey are on the rise this year. The state is already home to some of the highest auto insurance premiums in the country, but insurers are looking to raise coverage rates higher throughout the state. While higher rates were expected due to recent natural disasters, namely Hurricane Sandy, these disasters are not actually the reason for higher premiums. According to the New Jersey Department of Banking and Insurance, the rate hikes are actually due to 2011’s Tropical Storm Irene and a powerful storm that struck during Halloween two years ago.
Regulators approving rate increase proposals
State regulators have approved rate increases coming from 26 auto insurance companies this year. More rate increases are still pending approval, but regulators are expected to grant this approval within the coming months. Regulators note that the effects of Tropical Storm Irene are only now beginning to present themselves. The impact of the disaster was somewhat delayed, in an insurance sense, due to the federal aid that the state had received in the wake of the storm. Now, however, insurers are beginning to adjust to the impact of the storm and how it has affected the market for comprehensive auto insurance coverage.
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Rate increase considered modest by insurers
According to the auto insurance sector, the rate increases coming to New Jersey are modest and necessary. Most insurers are keeping their rate increases well below the 10% line, on average. For many drivers, the rate increases are not expected to make coverage significantly more expensive than it already is. The fact that New Jersey is home to the country’s most expensive auto insurance coverage, however, may mean that consumers are less than willing to accommodate increasing the cost of their auto insurance policies.
Insurers forced to account for natural disasters
Many drivers in New Jersey avoid purchasing auto insurance coverage due to the high costs. These costs are due to numerous factors, including the laws that exist in the state designed to govern the auto insurance sector. Insurers are well aware that higher costs are unpopular among consumers, but are forced to accommodate the impact of natural disasters in order to provide better service and continue to exist as a business.