N.Y. Auto Insurance Rates to See Minimal Increase

New York Gov. David Paterson 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 Gov. 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 Aug. 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.

On Sept. 30, the U.S. Department of Transportation (DOT) released new data showing that July marked the ninth straight month to see a decline in driving nationally. Since last November, Americans have driven 62.6 billion fewer miles than they did over the same period a year earlier – topping the previous peak decline in 1970’s of 49.3 billion miles. In the summer months of June and July 2008, New Yorkers drove 907 million fewer miles than in June and July of 2007.