New Jersey Governor James E. McGreevey and Commissioner Holly C. Bakke are celebrating what they say are two milestones on the road to a consumer-directed auto insurance marketplace – more than $100 million returned to policyholders and the opening of a new 57,000-square-foot office by the state’s largest auto insurance carrier, New Jersey Manufacturers.
“When it comes to auto insurance in New Jersey, consumers are in the driver’s seat,” McGreevey said. “In less than a year, our initiatives have put more than $100 million in the pockets of New Jersey drivers through rate decreases and special dividends, and created more jobs for New Jersey workers.”
New Jersey Manufacturers received approval last month for a rate reduction of -0.8 percent effective June 1, for a savings of $4.5 million for 548,500 NJM policyholders. This savings follows two voluntary rate reductions by State Farm Indemnity, one reduction by USAA, and a special dividend by NJM. As a result, policyholders have saved $133.9 million as the competitive marketplace takes hold.
“These rate reductions, coupled with the investments NJM and other companies are making in the New Jersey marketplace, are proof that competition is working for New Jersey drivers,” Commissioner Bakke said.
The officials spoke at the opening of New Jersey Manufacturers’ new branch office in Hammonton. Currently, the facility employs 120 workers, with plans to hire between 30 and 50 new employees throughout the year.
“The opening of this new facility is a significant signal that companies are investing in New Jersey again,” McGreevey said. “NJM’s expansion means more jobs for South Jersey, and is further evidence that New Jersey’s auto insurance marketplace is showing signs of recovery.”
Since the the auto reform law was signed in June, New Jersey has attracted its first new carrier in more than seven years, auto insurance companies have hired more than 1,000 new agents, companies have begun to advertise for business, and large national carriers are giving New Jersey a second look, according to the administration.
McGreevey said the reforms have produced the following results for New Jersey drivers:
• Mercury Insurance has entered the marketplace, the first new auto insurer in seven years; • Allstate has added new agents and is actively trying to enroll good drivers; • State Farm decided to suspend its practice of dropping coverage for 4,000 New Jersey drivers per month; • USAA and State Farm voluntarily reduced rates; • NJM reduced rates for 362,000 policyholders; • Appointment of more than 1,000 new auto insurance agents, and • 37,000 previously uninsured drivers are now contributing more than $54 million through the “Last Chance” program.
NJM Group is the state’s largest insurer and has a 15 percent share of the New Jersey auto insurance market.