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Once again, the New Jersey auto insurance marketplace is in turmoil. Carriers are requesting double-digit rate increases and threatening to pull out of the state. More than 1.6 million of the state's 4.8 million insured drivers will see their premiums increase because of rate increases that have been approved by the Department of Banking and Insurance (DOBI). Some of the insurers who have received rate increase approval are: Selective, State Farm, Colonial Penn, Liberty Mutual, Camden Fire, and Parkway.

In addition, some carriers have been given DOBI approval to reclassify drivers into higher rated "tiers". Tiers reflect a driver's ticket and accident record. Where some companies in the past might have "forgiven" one speeding ticket, that driver may no longer qualify for the preferred lower-priced tier. 

The most serious consequence of the negative auto insurance climate is State Farm's decision to leave the state. As the largest auto insurer in New Jersey, State Farm insures 780,000 automobiles. The DOBI must review and approve State Farm's withdrawal plan. Although the carrier is hoping to stop renewing policies one year from now, regulators, by law, can extend a company's withdrawal for up to five years. It would be difficult, if not impossible, for the remaining NJ auto insurers to cover all of the autos insured by State Farm. With the auto insurance marketplace in turmoil, it doesn't appear that the problems with New Jersey auto insurance will be resolved easily.