Paterson: Small Insurance Increase For State Drivers
Governor David A. Paterson has announced that auto insurance rates for New York drivers will increase by an average of less than one percent, meaning New York drivers will pay almost $515 million less than what auto insurance companies were originally seeking to charge. As part of Governor Paterson's call to make New York more affordable, the New York State Insurance Department issued a directive that required insurance companies to consider the impact of reduced driving due to higher gas prices before setting insurance rates, and as a result several insurers voluntarily reduced or withdrew their requested rate increases. Prior to this directive, this year's average requested increase from New York regulated auto insurance providers had been eight percent.
Forty-three companies - covering 75 percent of New York drivers - had rate filings pending on August 6, when the New York Insurance Department required companies to demonstrate how they were factoring in reduced driving when setting new rates. As a result, many of the companies withdrew or dramatically reduced their filed increases. Additionally, insurance companies that failed to provide adequate support for their filing or failed to respond to the Insurance Department's directive will not have their requested increases approved. New York residents already pay approximately $10 billion annually in auto insurance premiums.
"It's simply counterintuitive to increase rates by eight percent when people are driving less. Because of higher gas prices, New Yorkers are driving less and having fewer accidents as a result," said Governor Paterson. "New York's auto insurance rates are already the third highest in the nation, and if the original requests for rate increases had been approved, it would have cost New Yorkers more than $600 million. By working with these insurance providers, we have helped provide $515 million in badly needed relief for New Yorkers."