New Jersey drivers paid the highest average auto insurance premiums in 2001 for the seventh time in eight years, according to the latest report from the National Association of Insurance Commissioners.
On the low end is Iowa where drivers paid barely more than half the average premiums of New Jersey motorists.
Average premiums combine three separate coverages--liability, collision and comprehensive. Because liability coverage is tied to at-fault accidents, the most expensive premiums are in states with the most traffic. The states with the most traveled roads tend to have the most expensive liability coverage. The notable exception is Michigan ($294), with its unique no-fault system that bans most lawsuits in exchange for unlimited medical coverage for people hurt in accidents. The national liabilty average was $413.
Some of what Michigan drivers save in liability, however, they pay out in collision coverage. With unlimited medical coverage, Michigan paid the most ($416). The national average for collision was $271.
Comprehensive tends to be the cheapest coverage--costing less that $100 in Hawaii and Ohio. However, where auto thefts and hail damage are prevalent, premiums can go above $200. The District of Columbia ($230) tops that list. The national average was $133.
Even with the highest cost in the nation, New Jersey saw its average premium decline 6 percent from 1996 to 2001 while the national average grew by nearly 5 percent. Only two other states saw premium drops during this period--California (10 percent) and Hawaii (25 percent). Eight years ago, Hawaii was in New Jersey's shoes with the highest premiums in the country.
This year, New Jersey passed major reforms to make its highly regulated insurance market more competitive. Like Hawaii, it hopes to leave its national distinction behind soon.
AUTO INSURANCE COVERAGE
♦ Liability (required in all but a few states) pays bodily injury and property damage expenses--including legal bills-caused to others in an at-fault accident.
♦ Collision pays vehicle repair of the person who causes an accident.
♦ Comprehensive pays for other damages, such as theft, fire, vandalism, natural disasters and even hitting a deer.
