Gov. Chris Christie credits former Gov. Jim McGreevey for a decrease in New Jersey auto insurance rates

Gov. Chris Christie recently credited one of his Democratic predecessors for saving New Jersey drivers some money.

Christie, a Republican, said former Gov. Jim McGreevey helped reduce auto insurance rates in a state where drivers struggled for decades with high costs and few insurance options.

"I’ve got to give a shoutout to Governor McGreevey," Christie said in an "On the Line" interview with Steve Adubato. "He did a very good job on that while he was governor and our auto insurance, while still high, is not anywhere near as high as it used to be about a decade ago. And that's because we went to market-based solutions that brought more folks in here, created more competition, and now you have lower rates."

Any New Jerseyan with four wheels and a driver’s license knows insuring those four wheels can get expensive. But are drivers in the state better off because of changes enacted by McGreevey?  

First, let’s tackle how auto insurance rates have fared over time.

According to data compiled by the National Association of Insurance Commissioners, which represents insurance regulators, the average combined premium in New Jersey dropped from $1,316.49 in 1998 to $1,197.91 in 2008, the most recent year analyzed by the association.

The state’s average combined premium, which is the average price for a policy that includes liability, collision and comprehensive coverage, peaked in 2004 at $1,386.46.

PolitiFact New Jersey also looked at the average expenditure, a statistic that aims to measure what motorists spent on average for car insurance, including those who buy only liability coverage.

The average expenditure in New Jersey dropped  to $1,081.28 in 2008 from $1,138.28 in 1998. It peaked at $1,221.08 in 2004, according to NAIC numbers.

The NAIC notes that these measurements are calculated with no distinction for deductibles, vehicle types and other factors that can affect auto insurance rates, and does not rank states because of these issues. However, the rankings can be compiled from data in the reports.

According to our analysis, New Jersey had the most expensive combined average premiums in the nation, including Washington, D.C., from 1998 to 2004. In 2005 and 2006, D.C. pulled ahead and New Jersey dropped to second. But for the two most recent years of data, 2007 and 2008, New Jersey has ranked third, behind D.C. and Louisiana. The state’s rankings for average expenditure have a similar trend.

Is McGreevey the reason for the drop?

In 2003, McGreevey enacted changes to the state’s auto insurance regulations in a bid to attract more insurance companies to the state, increase competition and lower rates. The same year, California-based Mercury General, opened in New Jersey and other major insurance companies followed.

Although New Jersey’s average combined premium and average expenditure on auto insurance peaked in 2004, they have fallen annually since then, according to NAIC data.

But rates have also decreased nationally since 2004.

A national expert on auto insurance told us that while the movement in rates in New Jersey mirrors national trends "to some extent," costs are being pushed down by state reform efforts from McGreevey in 2003, and from reforms enacted in the late 1990s.

"It’s become a much more attractive place for companies," said David Snyder, American Insurance Association vice president and associate general counsel.

Three other industry experts said the reforms enacted during McGreevey’s tenure deserve significant -- if not complete -- credit for cheaper auto insurance in New Jersey.

John Dyke, a trustee of the trade group New Jersey Auto Agents Alliance, said "the reforms actually do help a lot because they drive competition within the market place."

The economy also is a factor, Dyke said, because more people are opting for less coverage.

Chuck Leitgeb, vice president of the Insurance Council of New Jersey, an organization that represents insurance companies in New Jersey, largely attributed the drop in prices to the reforms.

The drop in the average expenditure is "unquestionably the results of the reforms," said Brian Sullivan, editor of Risk Information, which covers the insurance industry. "They’ve unleashed a competitive frenzy in New Jersey."

Let’s recap.

Christie said market-based reforms enacted during McGreevey’s tenure helped drive down auto insurance costs in New Jersey, and experts we spoke with said reforms enacted in 2003 played a significant -- if not complete -- role in reducing rates.

We rate Christie’s statement True.

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