As Auto Thefts Plummet; Car Insurance Continues to Rise, Schumer Reports New York Auto Insurance Rates Still Third in the Nation Despite Falling Thefts, Injuries, and Fatalities

New York While car thefts in New York State plummet, the portion of automobile insurance rates specifically slated for motor vehicle theft continues to rise in New York, according to an analysis conducted by Senator Charles Schumer (DNY).

Between 1993 and 1997 the number of cars stolen in New York State declined from 151,835 motor vehicles to 79,740, a 47% reduction in car thefts. Meanwhile, comprehensive auto insurance for New Yorkers the portion of auto insurance which covers theft increased by 10%, from $177 to $195 per year. New York’s comprehensive insurance rate ranked second in the nation in 1997 even though the state ranked 25
th in per capita automobile thefts.

“There seems to be absolutely no relationship between the number of cars stolen and the amount New Yorkers pay to cover theft insurance,” said Schumer.

Overall, in 1997 New Yorkers paid the third highest average automobile insurance premiums in the country, typically $953 per policy and behind only New Jersey and the District of Columbia. New York’s average insurance rate climbed 14% between 1993 and 1997 despite a reduction in automobile fatalities (8.1%), personal injuries (3.6%), and car thefts (47.5%). Nationally, fatalities (+4.2%) and personal injuries (+8.1%) increased over the same period, and car thefts (16.4%) decreased far less than in New York State. The gap between the average automobile premiums nationally and what New Yorkers pay widened between 1993 and 1997 from $195 to $247 per year.

“The insurance industry seems to be living in the past. Relative to the rest of the country New York has made dramatic progress in thefts, fatalities and injuries but our rates rank so far higher than the national average it seems to make no difference what we do,” said Schumer.

In a letter to New York State Insurance Commissioner Neil Levin, Schumer called for a $73 reduction in automobile insurance rates “to reflect the national average for theft insurance and to bring our rates closer in line to what the rest of the nation pays.” In the letter, Schumer acknowledged that rates have held steady over the past two years “but our rates still do not reflect the progress we have made on thefts and accidents.”

In New York State, insurers may automatically increase rates by up to 7% without prior approval from the New York State Insurance Department. Rate increases greater than 7% need prior approval before they can go into effect.

In 1997, the five most expensive places to insure a car were New Jersey ($1,126), the District of Columbia ($1,039), New York ($953), Hawaii ($912), and Connecticut ($909). In 1993, New York’s insurance rates ranked seventh in the nation.

Automobile insurance rates vary widely throughout the state depending on location, driving record, value of the automobile, and the driver’s age. A 35 year old male in Suffolk County with a spotless driving record would pay $807 for the minimum Allstate coverage for a typical automobile. A 20 year old in Suffolk would pay $1,687 for the same insurance. A 69 year old would pay $707.

In Hempstead the same 35 year old would pay $829 for the minimum insurance; $1,765 for a 20 year old; and $729 for a 69 year old. In the Bronx the same 35 year old would pay $965; $2,199 for a 20 year old; and $891 for a 69 year old.

“The rates vary by county, but everywhere they are far too high,” said Schumer.

Auto Insurance Rate Trends (19931997)

Factors Affecting New York Rates Indicate Decrease as Rates Climb

Thefts and Comprehensive Insurance

  1. Between 1993 and 1997, New York’s 47% decrease in auto thefts was the steepest in the nation and triple the national rate of 16%. Meanwhile, comprehensive insurance rates increased 9.8% over the same period, exactly the same as the national average.

Typical of most states, Tennessee experienced a 6% increase in motor vehicle thefts while comprehensive insurance increased 5%. Minnesota had an 11% increase in motor vehicle thefts and comprehensive rates rose by the identical amount. Only New Jersey had a more severe split between thefts (28%) and comprehensive insurance rates (+33%).

Within New York State between 1993 and 1997:

New York City thefts decreased from 112,464 to 51,912.

Long Island thefts decreased from 16,130 to 8,264.

NYC suburbs and Upstate thefts decreased from 23,241 to 19,564.

Fatalities, Injuries and Liability Insurance

  1. Automobile fatalities nationwide increased from 35,780 to 37,280, an increase of 4.2% between 1993 and 1997. Injuries from automobile accidents increased from 2,022,000 to 2,185,000, an increase of 8.1% over the same period. Liability premiums, which cover hospital bills, compensation and lawsuits, increased by 6.9% over the same period from $412 to $440.

In New York State automobile fatalities decreased from 1,774 to 1,630, a decrease of 8.1% between 1993 and 1997. New Yorkers injured from automobile accidents decreased from 291,264 to 280,871, a decrease of 3.6% over the same period. Liability premiums increased 17.7%, more than twice the national average, from $545 to $641 over the same period.

Automobile Accidents and Collision Insurance

  1. Automobile accidents nationwide increased from 6,106,000 to 6,764,000, an increase of 10.9% between 1993 and 1997. Collision premiums, which cover automobile repairs from accidents, increased from $208 to $236, an increase of 13.3%.

In New York State automobile accidents increased from 257,209 to 263,604, an increase of 2.5% between 1993 and 1997. Collision premiums increased by 5.6% over the same period, from $263 to $278.

(Note: New York and national averages of each component of automobile insurance do not add up to the average insurance expenditure that people pay as individuals choose different levels of insurance.)

(Sources: National Association of Insurance Commissioners, New York State Department of Motor Vehicles, Division of Criminal Justice Services, National Transportation Safety Board, Bureau of the Census, New York State Insurance Department)



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