The Pew Charitable Trusts

The average state auto insurance cost dropped slightly in 1998, the most recent year for which there are statistics, according to a new National Association of Insurance Commissioners report. It was the first decrease in five years. The study focused primarily on insured vehicles with liability insurance, but not necessarily collision or comprehensive coverage.

Using those criteria, NAIC found motorists paid an average of $704.32 to insure their vehicles in 1998, compared with $707. 39 for 1997, a 0.43 percent decrease. NAIC, a Kansas City, Mo.-based organization that serves as an information clearinghouse for state insurance departments, offered no explanation for the slight drop in premiums.

However, the Insurance Information Institute -- which serves the insurance industry -- said older, more cautious baby boomer drivers and competition between insurance companies helped drive down the cost of auto insurance in 1998.

While the national average in auto premiums declined, New Jersey maintained its unenviable position of having the country's highest rates, according to NAIC. Garden State drivers paid an average auto insurance premium expenditure of $1,138.28 in 1998,

With the emphasis on liability coverage, New Jersey since 1995 has consistently been the only state where average annual premiums have topped one thousand dollars. New York was second in 1998 with $959.77, followed by Connecticut at $900.60, then Rhode Island, which came in fourth at $851.79.

Responding to outraged constituents, New Jersey lawmakers last year mandated a 15-percent rollback in auto insurance rates for most drivers. While the insurance law changes passed by New Jersey's Legislature had no affect on data for 1998, NAIC's tabulations for 1999 will be watched with interest. An insurance industry study indicated that New Jersey auto insurance bills fell an average of $173 in 1999, the Newark Star-Ledger reports.

North Dakota motorists paid the least for straight liability coverage in 1998, $452.03, followed by Iowa's $458.98, South Dakota's $479.24 and Maine, where motorists paid an average of $492.05 to insure their cars.

Three of the most populous states saw their liability auto premiums drop. California had the biggest decline, going from $773.32 in 1997 to $717.98 in 1998. As a result, the Golden State's ranking went from 16th to 21st.

Texas went from an average of $740.09 in 1997 to $730.66 in 1998, keeping the Lone Star State in 16th place for both years. Florida experienced a $20.09 decline in auto insurance premiums, from $790. 64 in 1997 (No. 11) to $770.55 in 1998 (No. 12).

This year, Mississippi Gov. Ronnie Musgrove signed a bill into law requiring all drivers to carry liability insurance beginning Jan. 1, 2001. That leaves Tennessee, Wisconsin and New Hampshire as the only states not requiring liability coverage.

Over the last four years Congress has proposed a national no-fault auto insurance bill, with an eye toward lowering auto premiums. "But the legislation doesn't go very far, because Congress has better things to do and doesn't want to infringe on states' rights," NAIC spokesman Eric Nordman said.

In 1970, Massachusetts became the first state to enact a no-fault auto insurance law, NAIC said. Since then, Colorado, Florida, Hawaii, Kansas, Kentucky, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah have followed suit.

Connecticut, Georgia and Nevada also adopted no-fault car insurance laws, but later repealed them.