New Rules for NJ Insurance
 

Effective February 1, 2009, NJ is back to a potentially difficult enviroment.

A few terms I'll define first.

"Take all comers" is an enviroment where companies who write in NJ must accept all comers with 7 pts or less within 3 years.

"Incidents" are any moving violation, chargeable accident or non-chargeable accident.

Combined Ratio" combination of loss ratio and operating expense.

New rules (which would apply to most here) - If you are one vehicle and have more than one incident within the past three years, you are ineligible for voluntary insurance. If you have more than one vehicle, then we will accept as many incidents as vehicles. For example, 2 vehicles and we will accept no more than two incidents within 3 years. 3 vehicles=3 incidents spread amongst all drivers!

What has happened? Competition has brought lower rates. Lower rates means higher combined ratios if underwriting is not in check. So now companies will scramble to correct underwriting.

What we are seeing is a higher occurance of companies non-renewing insureds from all companies. It has gotten very busy lately because of this.

Should you have questions with your carrier or Allstate, post them here and either Chase or myself will respond.

Thanks for the info Rick! :tup:

what does this mean, you God forbid get into two accidents in a 3 year period and insurance will drop you?

It has more to do with eligibility for new business. Carriers are non-renewing business that have cost them significant losses. I have seen a few in the last few days who have been dropped for three or four incidents in the last three years.

Keep in mind that loss ratios will always dictate how erratic Insurance companies behave. Here in NJ we are now five years into a competitive enviroment where companies have sharpened their pencils to a degree that may have caused an overcompensation or imbalance. Companies now need to adjust to the consequences. They will start by denying coverage to those they feel are underwriting risks.

We, as a group of enthusiasts, represent an overall good risk. Most here are early twenties to early thirties, college educated, on their way or in a career. Contrary to the vehicles you drive, you still (as a group) represent a responsible group with pretty good driving records and loss records.

Time will tell how this plays out. In the short term, it will cause a little pain to some.