Car insurance is slammed as a rip-off for Islanders

Staten Islanders are being taken for a ride by their auto insurance providers, according to a report released yesterday by City Comptroller William Thompson, which showed Island insurance rates that are unreasonably higher than those upstate.

For instance, a 35-year-old Staten Island man pays $871 for the minimum annual coverage provided by Allstate Insurance for a private passenger car, compared to $205 for a similar man in suburban Rochester. State Farm Mutual charges $1,076 for such a policy on Staten Island, compared to $407 in Rochester.

The revelation was part of a larger report that focused on ballooning rate increases in New York City over the past five years.

"There's no defensible reason why our auto insurance premiums are so high," said Thompson during a news conference in Lower Manhattan. "It creates real hardships for people."

While policy pricing varies across locations according to the firm's losses in that area, Thompson said New York City's numbers are "still way out of whack," particularly since insurance firms' losses in claims payouts have plummeted in New York.

Statewide, drivers paid $10.5 billion in auto insurance premiums in 2005, up 29 percent from 2000, when they paid $8.2 billion. But during the same period, inflation rose by 13.4 percent.

And the percentage of claims paid by companies dropped by 20 percent, to $5.1 billion from $6.4 billion, according to the report. Reasons for the decrease include changes in state regulations that have driven down no-fault filings, and a crackdown on insurance fraud, said Thompson.

Drivers in the Bronx, Brooklyn and Queens have been hardest hit by the increases, while Staten Island rates from the state's four largest insurers have on average have remained flat for the past five years. Those insurers are State Farm, Allstate, Geico and Progressive NE.

"What we're seeing are premium increases that vastly outpace the rate of inflation and in some cases have exceeded 40 percent," said Thompson during a news conference in Lower Manhattan. Noting that companies are reaping excessive profits, Thompson added the industry "is essentially picking the pockets of New Yorkers."