N.J. Auto Insurance Complaints Drop

A recently released tally of auto insurance complaints in New Jersey underscores the improvement consumers have experienced since the state reformed its regulations in 2003, a state official said.

This month the state released its 2006 Auto Insurance Consumer Information Report ranking auto insurers by the ratio of valid complaints to number of vehicles insured.

The worst on the list was AIG Centennial Group with a ratio of 1.441. Nine insurers had no valid complaints, all tied at 29th on the list, including the state's second largest auto insurer, New Jersey Manufacturers Insurance Group--ranked by direct written premium, according to National Underwriter's Highline Data Service.

Jim Gardner, a spokesman for the New Jersey Department of Banking and Insurance, said the state has seen a dramatic dip in complaints since legislative reforms for auto insurance were implemented. He said initial consumer complaints have dropped from more than 6,000 in 2003 to around 3,035 in 2006.

"We are seeing a great deal of consumer satisfaction," he said. "We are happy with the job the industry is doing to keep these complaints to a minimum."

He credited the reforms with removing two serious problems consumers experienced in the past: availability and affordability. Since the reforms, a number of major auto insurers have returned to the marketplace, including GEICO and Progressive.

Another sign of an improving marketplace is that the number of customers in the residual market has been cut in half since 2003, said Mr. Gardner. That figure has dropped from 140,000 to 61,000 motorists in 2006.

Of the valid complaints, he said, they were not major in nature and primarily dealt with claim disputes.

While it was ranked 16th by ratio, Allstate New Jersey Insurance Company had the largest number of complaints at 34. It fell in the ranking from 11th in 2005. Allstate is the number one insurer in terms of premium. The company's independent agent brand, Encompass, stood at 23rd with three complaints.

Of the other major carriers, GEICO was ranked 18th with 25 complaints; Progressive was 27th with one complaint; State Farm 26th with 8 complaints; Liberty Mutual was 20th with 11 complaints; St. Paul Travelers was 19th with 9 complaints; AIG 12th was with 13 complaints (AIG Centennial Group is listed as a separate company handling assigned risk exposures); and Hartford Group was 7th with 2 complaints.

Patrick W. Breslin, spokesman for West Trenton-based NJM, noted that the report was significant for his company because it topped the other carriers in the number of vehicles covered, making it the number one auto carrier in the state.

This is the first year the insurer had no complaints, he said, but it has consistently ranked among the lowest in valid complaints since the report began in 1987.