The New Jersey Automobile Insurance
The New Jersey Automobile Insurance
The New Jersey automobile insurance experience illustrates the importance of a balanced marketplace, and a road map to achieving it. Regulators well know the challenge. They must provide consumers with real and affordable product choices from a variety of insurers.
At the same time they must foster an environment where insurers, as businesses, can operate at a profit and remain solvent. While these two interests often collide, protection of the public and a robust insurance industry are mutually accessible goals.
The history of auto insurance reform in New Jersey offers insights into the relationship among regulation, competition and protection of policyholders, For many years New Jersey regulators tilted toward the policyholder by restricting rates and underwriting criteria.
However, the result of those actions–lack of capacity in the admitted market and a high-priced residual market–actually hurt rather than helped the consumer. The lesson learned was that a healthy insurance market best served insurers and consumers, and that a balancing of interests was the best way to achieve it.