Bill Gottdenker received his last moving violation, a speeding ticket in Vermont, in April 1999.
His wife Ellen Gottdenker’s most recent speeding ticket was 15 years ago in Clark.
And accidents or other claims?
“On one occasion a truck clipped the side mirror off our parked car, and on another occasion a wire basket in front of Five Below broke free and dented our car,” Bill Gottdenker said. “About 22 years ago our daughter was involved in a serious crash in a car under our policy which was the other driver’s fault.”
None of those events happened under their current insurance carrier, NJM, which they’d been with for five years.
So the Gottdenkers were stunned when they received notice that their auto insurance premiums are going up about 17%.
“I fail to see how the state could approve this rate increase for two senior citizen drivers who have nearly perfect driving records, who have not filed a claim in at least 10 years, and who drive less than 10,000 miles a year in an environment of 3.5% inflation,” Bill Gottdenker said.
As families across New Jersey grapple with higher prices on everyday items because of inflation, it’s often a shock to the system to see a big hike in insurance premiums, especially if a driver’s history hasn’t changed.
It’s not just NJM. From January 2023 through the end of April, more than 100 companies received state approval for rate increases, with 20 getting double-digit hikes, according to data from the Department of Banking and Insurance (DOBI). And more companies have pending requests, it said.
The rate hike requests are because of a combination of inflation, supply chain issues, increases in new/used car prices, higher car repair costs and more “incidences of excessive speeding and distracted driving that result in more severe accidents and fatalities,” Dawn Thomas, a spokeswoman for agency, previously told NJ Advance Media.
Generally, insurers that receive rate hike approvals won’t raise rates wholesale, but instead, other risk factors would be considered, including driver history, where a driver lives and even the driver’s insurance credit score.
Let’s use Bill and Ellen Gottdenker as a case study.
THE CASE STUDY
NJM sent the couple a letter on May 10.
“Because inflation continues to impact the cost of auto repairs, replacement vehicles and medical care, we need to implement a rate adjustment,” the letter said. “Each policy will be impacted based on its individual risk characteristics.”
The Gottdenkers figured it wouldn’t be too bad given their clean driving histories and because they drive less than 10,000 miles a year between their two cars.
Each car has the same coverage: $500,000 liability coverage, $300,000 of uninsured/underinsured motorist coverage and $250,000 of Personal Injury Protection (PIP) with a $2,000 deductible. They also have $10,000 of extended medical coverage and a $1,000 deductible for collision.
Their 2023 Subaru Crosstrek had an annual premium of $889 before the increase, which set the premium at $1,032, a 16.09% jump.
The second car is a 2024 Lexus RX350h. It had a premium of $1,159 a year before, then it went up to $1,359, a 17.25% increase.
NJM policyholders receive an annual dividend that’s applied as a credit when a policy is renewed.
The dividend took $94 off the couple’s overall bill.
We asked NJM, which had more than half a million auto policies in New Jersey at the end of 2023, about the couple’s premiums.
It said it couldn’t discuss the details because of privacy reasons. But it did talk about the current climate and how rate hikes fit in.
“Auto insurance policies are rated based on individual risk, but the historic inflationary pressures experienced by the industry are impacting policyholders regardless of their claims or driving history,” said Linda Coles, the company’s public relations manager.
She ticked off a list of the issues, including higher car prices, higher repair costs for both parts and labor and increases in severe accidents.
Coles said NJM’s personal passenger automobile rate increased 6.0% in 2023 and 7.9% in 2024.
And according to state data, it has yet another pending request for a 6% increase.
She would not comment on any future rate increases, only saying the company “continues to evaluate the market and the impacts of inflation on our policyholders” and that the rate increases ensure NJM remains financially strong to pay claims.
She said the Gottdenkers could call the company directly with questions.
Gottedenker said he’s called twice, and neither representative gave any suggestions on how to lower the premiums. He knows he could reduce his coverage, but he doesn’t want to.
He said he’s happy with NJM’s customer service, but he will look into alternatives with other companies.
That’s pretty much all he can do.
There are several ways to lower rates, but they may not all be appealing. You can lower your coverage in exchange for cheaper premiums, but that can ultimately hurt you. You can make sure to bundle your policies with the same company, which the Gottdenkers already do. Ask your company about any affiliate discounts, such as for alumni of certain colleges or members or certain groups, and see if taking a defensive driving course would mean more savings.
The other option? Shop around and see if any insurance companies can give you a better offer for the same coverage.
Before you do, take a look at the Department of Banking and Insurance’s Auto Insurance Buyer’s Guide.
Stories by Karin Price Mueller
Please subscribe now and support the local journalism YOU rely on and trust.
Karin Price Mueller may be reached at [email protected]. Follow her on X at @KPMueller.