ALBANY – The number of New Yorkers forced into an expensive state insurance plan by a jump in no-fault claims and a slowing economy has skyrocketed, The Post has learned.
After years of decline, applications for coverage in the state’s assigned-risk pool soared 62 percent last year, and is expected to at least double this year, according to the Automobile Insurance Plan Service Office, the plan’s administrator.
A person can apply to the assigned-risk plan only if he or she cannot get coverage within the previous 60 days.
“The market is tightening, and insurance companies are finding fewer drivers acceptable to insure within the framework of their rates,” said AIPSO spokesman John Verruso.
Those in the pool pay substantially higher rates than those with standard policies.
The Post reported on Tuesday that premiums for assigned-risk drivers are set to jump 18 percent. In the city, the increases will go as high as 30 percent.
Inexperienced drivers and those with poor records typically find themselves in the assigned-risk plan.
But even good drivers can fall into the high-risk category because the kind of cars they drive are subject to higher rates for theft and accident insurance.
One-third of the drivers in the assigned-risk plan in 1998 did not have an accident claim within the previous three-year period, according to state Department of Insurance statistics.
But insurance companies say they can no longer afford to take the risk with some drivers because the sagging economy has softened the firms’ investment performances.
“If you make a lot more money through investments, you can afford to underwrite a wider array of risks,” said Robert Hartwig, chief economist of the Insurance Information Institute, an industry group.
A bigger factor, Hartwig and others say, is the substantial rise in the costs associated with the state’s no-fault coverage, which makes up between 20 and 30 percent of a total policy.
State officials and industry experts blame organized no-fault fraud and abuse as a major reason New York’s overall auto-insurance rates are the second highest in the nation, after New Jersey.