Thomas B. Consodine, who was appointed to the position of Commissioner of the State Department of Banking and Insurance last February, has decided to withdraw plans to increase auto insurance rates in rural areas of New Jersey to compensate for the higher premiums that are enforced in built-up areas.
The Territorial Rating Equalization Exchange (TREE) was originally introduced in 2007 but objections from New Jersey road users ensured that the plan was never formally implemented. Although the idealistic nature of the proposed scheme would have seen a greater level of equality relating to auto insurance quotes and premiums within the state of New Jersey, the reality of the situation has been described as being nothing more than ‘regulated socialism’.
The New Jersey Manufacturers Insurance Company, who continue to be the largest insurer in NJ, have long been opponents of the TREE program and have been to court on several occasions to cite the fact that the State Department of Banking and Insurance has no legal authority to actually enforce the scheme. However, the program has received unexpected support from Cure Auto Insurance. The Princeton company has continually highlighted the fact that those living in urban areas are now paying up to 112% more than the national average for their auto insurance coverage.
Consodine himself was more open about his own views of the TREE scheme. “It was a little too open-ended,” he said. “”I came away after some briefings confirmed in the view that it was a solution in search of a problem.”.