Date: Fri 17-Jul-1998

Publication: Bee

Author: CURT

Quick Words:

edink-car-insurance-rates

Full Text:

ED INK: Our Rising Car Insurance Rates

Here in Connecticut, we are used to paying a premium for everything from movie

tickets to housing. We are reminded on our out-of-state summer vacation

travels that not everyone is paying what we do for gas, groceries, restaurant

meals, clothing, and entertainment. When the cash register tolls in

Connecticut, it tolls for thy bank account.

So it should come as no surprise that Connecticut motorists pay the fifth

highest rate for automobile insurance in the nation. The typical car owner in

Connecticut paid $899 for insurance last year -- unless, of course, he or she

didn't have a lot of money and lived in one of the state's inner cities. Then

the rate jumped to $1,100. (Their neighborhoods aren't "nice," which

automatically costs them a couple of hundred bucks, even though they may be

safe drivers and never file a claim.)

Connecticut's high-profile attorney general, Richard Blumenthal, wondered why

the rates were climbing so high when the state's baby boomers were compiling

much better driving records as they aged and the cars themselves were becoming

safer with air bags and better braking systems. He commissioned a study by an

industry expert of insurance company profit margins and claim pay-outs since

1996. The results of that study make the insurance companies look greedy.

Private passenger auto insurance providers in Connecticut posted profits of 17

percent statewide in 1996, compared to the nationwide average of 12.1 percent.

In 1997, they dipped a little deeper into Connecticut's wealthy pockets,

boosting their profit margin to 21.5 percent. The insurance company expert who

conducted the study noted that the target profit margin for companies should

be 15 percent at most.

We have seen car insurance rates become a hot political topic in New Jersey,

and this latest study should help it become one in Connecticut, especially

since its release was timed to coincide with the beginning of the state

election campaigns. We would like to hear from the insurance company

executives why they feel they need to rake extra profits from Connecticut

premium holders when lower rates seem to suffice for other areas of the

country. Legislative hearings on this issue are in order.

We hope all the debate and posturing that is likely to occur on this issue

this campaign season yields a more sensible rate structure on the part of the

insurance companies, and lower rates for Connecticut drivers.