NU Online News Service, May 19, 6:05 p.m. EDT--AIG Auto Insurance announced yesterday that effective June 30 it will lower auto insurance costs by 4 percent for policyholders in New Jersey.
The announcement represents a growing trend among auto insurers reducing rates in the state in recent months. Selective, Chubb, Amica, Parkway Insurance, and New Jersey Citizens United Reciprocal Exchange (NJCURE) have all announced rate decreases in the last six months.
The AIG rate decrease will affect over 115,000 vehicles and result in more than $5 million in savings for more than 55,000 New Jersey drivers insured by American International Insurance Company of New Jersey, the company said.
Currently, AIG represents over 5 percent of New Jersey drivers.
Perry Krasnove, a spokesperson for the New Jersey Department of Banking and Insurance, said since the state approved legislative reforms for the insurance industry in 2003 there have been 29 rate decreases between 17 auto insurers resulting in a savings of $334 million.
According to Mr. Krasnove, Selective policyholders are expected to save over $11 million while the rate reductions by Chubb will save New Jersey drivers $1.1 million.
NJCURE recently announced discounts up to 20 percent for long-term policyholders with accident and loss-free driving records. In total, the rate reductions by these six auto insurers will affect over 385,000 New Jersey drivers, according to state calculations.
"The New Jersey marketplace has been very competitive since the 2003 reforms and with talks of Progressive entering the market [it looks to be] more competitive in the near future," said Mr. Krasnove.
Last summer GEICO returned to New Jersey and Esurance entered in March, Mr. Krasnove noted.
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