"The more time we go with positive news, the better off we are," Mr. Stokes said.

New Jersey state officials would agree with that assessment. In a report issued earlier this year, Acting Commissioner Donald Bryan said the entry of Esurance Insurance Company (a unit of White Mountains), Progressive and GEICO into the market means more choice for consumers.

In addition, AIG remains in New Jersey, restoring its commitment to policyholders, and First Trenton Indemnity Company (now called Travelers of New Jersey) has 60 more agents.

Even Seattle-based SAFECO, which currently writes no personal auto business in New Jersey, is considering the possibility of re-entering the state, according to Michael LaRocco, president of product, underwriting and claims. In a recent interview with NU Mr. LaRocco said, "If we do re-enter, I don't see it until sometime later in 2006." Although New Jersey presents a "uniquely exciting opportunity, because it is so big," he said, "we want to be smart about it. And we want to make sure we don't lose our focus on the states we're already in."

Two years ago, the state enacted a series of market-oriented reforms that among other things removed the "take all comers" provisions and premium caps on urban drivers, and included new measures for fighting fraud.

"The total benefit to policyholders since the reforms has reached $300 million (premium reductions and dividend payment) for 56 percent of the marketplace," the report by the insurance department stated.

Earlier this month, Acting Gov. Richard Codey continued the drumbeat of good news when he said that High Point Insurance would reduce its rates more than $4.5 million for 64,000 policyholders in the state.

"Three years ago, our drivers were on the road to nowhere when it came to shopping around for auto insurance policies. Now, our drivers not only have plenty of choices, they also have incentive to stay with their current company," he said.

In addition, the governor said that Liberty Mutual has returned more than $23 million to drivers in the form of rate reductions and dividends.

Mr. Codey said the appointment of more than 1,500 N.J. auto insurance agents and an agency opening in Paterson for the first time in 20 years are further signs of the improving market.

John Latimer, president of the Professional Insurance Agents of New Jersey, said availability is no longer an issue. The fact that the assigned risk applications are now down 30 percent year over year also is a good indicator of the health of the market.

"The concern was when they changed the law and did away with 'take all comers' the assigned risk was going to grow," he said. "The counterargument seems to be accurate--that when you bring in more companies, they will take more people and the [number of] assigned risks will go down," he said.

From an industry perspective, there has been bad news in the form of a New Jersey Supreme Court decision last June that removed restrictions on pain-and-suffering claims stemming from auto accidents. The court found that the state auto insurance reform bill that restricted bodily injury suits does not limit such claims for pain and suffering to those injuries that have a so-called "serious life impact."

Mr. Latimer said the Supreme Court case, Christine DiProspero v. Barbara Penn, could be a "problem"

"You can see it restricting the market a little bit. We expect rates to rise for bodily injury, and that companies that were thinking about coming in will now think twice unless the bills are passed to reimplement the 'serious life impact' test," he said.

A series of reforms passed in 1998 offered state drivers the opportunity of lower premiums if they limited their right to sue for non-economic damages to instances in which they suffer "a bodily injury which results in death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of a fetus, or a permanent injury other than a scarring or disfigurement," according to a briefing paper issued by PIANJ.

But what was not clear in the 1998 law was whether the legislature also intended to maintain the "serious life impact" test, which had been an additional burden to meet since a 1992 court decision. The Supreme Court ruled the lawmakers had every opportunity to include such a test, and their failure to do so meant it couldn't be applied.

New Jersey still maintains a prior approval rate filing system. But a flex-rating leeway of the low-single digits does give carriers a new ability to navigate market ins and outs more efficiently, Mr. Latimer said.

While credit scoring has been in the state in some form for the past two years, it is only in the last six months that all companies have been allowed to implement it.

"Credit scoring is catching on. Consumers are starting to understand it after the initial surprise that credit could affect their auto rates," Mr. Latimer said.

(Additional reporting by Susanne Sclafane.)

Flag: Garden State Blooms

Head: New Jersey Private Passenger Auto Rankings

Berkshire's Hathaway's GEICO, Los Angeles-based Mercury General, and the Esurance subsidiary of White Mountains Group, appeared among New Jersey's top 25 private passenger auto insurers for the first time in 2004. While reforms have made the state more attractive to insurers, the loss ratio remained about average, at 57.1 in 2004, compared to 58.6 for the nation overall.