Federal lawmakers Thursday learned that New Jersey’s auto insurance crisis has impacted more than a quarter million people within the past three years alone, forcing drivers to search for auto insurance in a market bereft of auto insurers.
Testifying before the House Financial Services Capital Markets Subcommittee, Coalition for Auto Insurance Competition vice chairman John Marchioni explained that excessive regulation of the industry has lead to a shortage of insurance for consumers seeking coverage.
The Coalition for Auto Insurance Competition’s statewide public education campaign has informed citizens and lawmakers that years of reported politicizing and over regulating auto insurance has caused the exodus of auto insurers from New Jersey, leaving consumers with too few companies from which to purchase auto insurance.
Five of the six largest auto insurers in the nation do not sell auto coverage in the state and more than twenty auto insurers fled New Jersey in the past decade. Nearly 40 auto insurers have withdrawn from New Jersey since 1976 and several more have announced plans to stop doing business in the state.
“To solve the current capacity and availability crisis, it is imperative for additional capital to be invested in the New Jersey auto insurance market. But the private sector is unlikely to take that step until the numerous regulatory barriers to competition are dismantled. Reforms must give existing insurers confidence they can effectively serve their customers, generate a competitive rate of return, and attract additional insurers to enter the marketplace,” Marchioni said.
The Coalition supports New Jersey State Senate Bill No. 63, which passed the State Senate and is expected to be considered by the New Jersey General Assembly in May. The New Jersey Automobile Insurance Competition and Choice Act has the backing of Governor James McGreevey and a bipartisan group of legislators in both houses.
“Assuming S-63 is signed into law, the required regulatory changes are swiftly enacted, and the reforms are allowed to take root without political interference, New Jersey could become a more attractive market for insurers, with the state’s consumers the ultimate beneficiaries,” Marchioni added.