F our years ago, Christine Todd Whitman was hailed as a rising Republican star when she was elected governor of New Jersey. Her career was almost cut short this last election, however, largely due to voter anger over rising auto insurance rates. The average policy premium jumped 44 percent between 1987 and 1994, nearly 50 percent faster than the rate of inflation. The burden falls most heavily on poorer Americans, particularly urban residents, who typically spend three times the share of income for auto insurance as do the wealthiest Americans.
Some poor people spend as much as a third of their incomes to insure their cars.
That's not all. Many of those involved in accidents receive only inadequate recompense after a long delay. Those suffering even higher losses average barely a 9 percent recovery rate. An incredible 40 percent of every premium dollar paid to cover bodily injury and uninsured motorists goes to lawyers. An incredible 40 percent of every premium dollar paid to cover bodily injury and uninsured motorists goes to lawyers.