NY Times on Auto Insurance Deregulation

New Jersey had a serious auto insurance problem for years.  It got so bad that insurers were leaving and the biggest were on the way out the door.  Three years ago they deregulated and let insurers set their own prices much to the chagrin of the consumer disadvocates.

Here are some quotes from  recent NY Times (8/24) article.

For the first time in decades, prices for coverage are falling in the state and insurance companies are fighting for drivers’ business. Roadside billboards cry out with special deals; radio and television are peppered with car insurance advertisements.

It is a mammoth change in a state where auto insurance has been a long-running nightmare and it puts New Jersey in line with auto insurance practices in most of the country.

More tellingly, it provides a case study in what happens when competitive forces are unleashed and markets are allowed to operate more freely. And while some drivers are worse off, the vast majority of consumers have gained from the changes.

Throughout the country, New Jersey and Massachusetts stood out for their heavy regulation. Some of the biggest insurers shunned the states. But that started changing in New Jersey when state officials, worried that even more insurers would leave, finally decided to give the industry much more flexibility with prices and driver ratings.

…

Some of New Jersey’s worst drivers are paying more than before and some drivers have experienced little, if any, change in their premium costs. But agents around the state say costs have fallen for most of their customers and many are paying as much as 30 percent to 40 percent less.

Even some drivers with poor records are saving money. Over all, state regulators say, drivers have saved more than $500 million since the regulatory controls were relaxed.

With nearly 20 new companies doing business in New Jersey — introducing much more variation in price and service levels among insurers — nearly a third of the state’s three million drivers have switched carriers.

[my emphasis]

Read the rest and note the similarities to the Florida homeowners market.  Strict price regulation and high prices because capacity is not committed to Florida.