David Madara, president of the Professional Insurance Agents of New Jersey Inc., told the Assembly Banking and Insurance Committee at the state house in Trenton last week that reforms to New Jersey’s ailing automobile insurance market were absolutely necessary.
Madara’s comments were part of testimony solicited by the Assembly Banking and Insurance Committee on the general issues related to auto insurance industry in New Jersey.
“The problem is availability, not affordability. Insurance companies simply don’t want to do business in our state,” Madara said. “Many insurers have already left, with others such as State Farm in the process of leaving. This has led to an insurance availability crisis that is hurting New Jersey consumers and threatening the livelihood of independent insurance agencies.”
Madara told the committee there are not enough insurance markets for all the consumers looking for coverage, and the independent insurance agents are caught in the middle.
“Legislative action must be taken to attract new insurers into the state and to keep existing ones from leaving. This can be done by changing laws, such as the take-all-comers, the excess profits laws and the current rules for approving rate increases,” he said.
Madara also discussed the additional challenges that agents face because of the recent increase in the cost of motor vehicle records. He explained that agents must obtain MVRs to properly rate and underwrite an application for personal auto insurance, yet agents cannot ask customers to pay the cost of these reports.
Madara offered several suggestions to ease agents’ hardships including: allowing agents to recoup their MVR costs; and changing the current requirement that agents provide quotes for every company they represent.
“Agents should have the flexibility to recommend an insurance program that is tailored to the applicant’s specific situation,” Madara added.
Was this article valuable?
Here are more articles you may enjoy.