N.J. Department of Banking and Insurance Unveils 2003 Auto Company Performance Info for Residents

February 19, 2004

In an ongoing effort to reportedly give New Jersey residents the tools they need to choose the auto insurance policy that is right for them, the Department of Banking and Insurance recently released the first Auto Company Performance Report For Consumers.

“The Governor has made it clear that the new auto insurance marketplace must give consumers choices in companies, policies, and coverage options and the information they need to make those choices,” said Banking and Insurance Commissioner Holly Bakke.

The information released by the Department will help residents evaluate how their insurer compares to others in the marketplace. Bakke explained, “As the competitive marketplace develops in New Jersey, the Department of Banking and Insurance is committed to providing drivers with the information they need to make good decisions regarding the coverage they want, they need, and how much they want to pay for their auto policy.”

The information released is the first step in a program that will result in the Auto Insurance Company Consumer Report Card that will be issued this summer. In addition to the Report Card, residents will be receiving a Consumer Bill of Rights and have access to an interactive web-based guide to understanding coverage options. A new Three Scenarios Program will provide dollars-and-cents examples of what different choices mean, and a consumer friendly buyer’s guide will make coverage decisions easier to understand. All of these tools were mandated as part of the Governor’s auto reforms.

The information released includes several tools for residents. The information ranks companies by valid complaint ratios, which is the number of valid complaints compared to the total number of cars covered by that company. Valid complaints are complaints in which insurer’s actions were found to violate state insurance rules or laws or situations that should have been resolved by the insurer without Departmental intervention. The total number of complaints filed against each insurer is provided.

The 42 insurers currently insuring New Jersey drivers are listed. The Rutgers Group, with a market share of .63 percent had the highest valid complaint ratio, while Tokio Marine and Fire, with a market share of .05 percent had the lowest. The state’s largest carrier, New Jersey Manufacturers, ranked near the bottom of the list at 39.

Also included in the information released was an indicator of company financial strength produced by a leading national rating agency. It is important to note that 10 companies have been downgraded in the last year, indicating a reported continued need to strengthen the New Jersey marketplace for consumers, as compared to two companies that have been upgraded.

Bakke also announced that the Department’s consumer protection efforts on behalf of drivers yielded $1,272,755.80 in recoveries. This money was returned directly to residents in the form of refunds. This recovery amount is a 58 percent increase over last year’s recovery amount of $804,792.05.

“Policyholders have a right to expect insurance companies to play by the rules and to be held accountable when they do not. The Department is here to make sure policyholders are dealt with fairly and in accordance with the law,” Bakke noted.

Over the last two years, the Department of Banking and Insurance has reportedly made significant progress in helping New Jersey drivers take full advantage of the choices the competitive marketplace is making available. Bakke has begun visiting Motor Vehicle Offices throughout the state to talk directly to drivers regarding the choices they can make to control what they pay. Additionally, the Department has opened two consumer centers, in Newark and in Camden, to assist drivers in understanding their policy or filing complaints. The Department also has prepared a Consumer’s Guide to Auto Insurance currently available for comment on the Department’s Web site, www.njdobi.org.

“Today’s information, along with the other tools the Department is preparing in order to implement the Governor’s reforms, are moving New Jersey from a state where drivers felt powerless in managing their auto insurance, to a state where consumers truly are moving into the driver’s seat,” Bakke added.

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