Posted on 11 Aug 2010
The New Jersey state insurance commissioner is in the process of withdrawing a plan introduced in 2007 that would have subsidized premiums for the auto insurance customers in the state who pay the highest rates of coverage.
The Territorial Rating Equalization Exchange had been submitted originally by the previous commissioner to try to level out prices across the state for drivers living in urban areas; rates in these areas are more since they tend to see higher accident rates than those in rural areas, and that risk is reflected in premium levels. The proposed exchange would have tacked on a premium fee that would have been used to level out the increases seen by drivers in areas characterized as a higher coverage risk.
OnlineAutoInsurance.com advises consumers in the Garden State and the rest of the U.S. that the best way to find cheap auto insurance is to perform a comprehensive comparison among multiple carriers. This is especially important for residents of New Jersey and other states that have high average expenditures for coverage.
The National Association of Insurance Commissioners estimated that New Jerseyans had the second-highest average expenditure on auto insurance in 2007, with $1,104 as the average. Shopping around is important because the rates offered by one insurer may vary widely from another since each uses a different formula when weighing driver factors.
If consumers find themselves in a situation where the quotes from carriers are still not quite low enough, the New Jersey Department of Banking and Insurance (NJDOBI) recommends that consumers consider tweaking their coverage. Agreeing to pay a higher deductible, for example, may result in a premium reduction. Also, a premium reduction may result from a consumer's choosing a health care insurer as the primary insurer for auto-accident-related injuries. Shoppers should consider, though, the implications that steps like these could have down the line. The NJDOBI states, "Remember, a higher deductible means you will pay more out of pocket in the event of an accident."