Between 1990 and 1995 car theft in the City of New York declined by 51%. At the same time, auto insurance premiums for the citizens of New York increased by 8.8%.
The insurance industry has made several attempts to explain this inequity. First they claimed that a dramatic drop in theft in any given year was statistically insignificant ... that they needed to see a long-term trend toward fewer car thefts. We pointed out that there have been steady decreases in car theft over a five year period.
And while the insurance companies may still claim that five years isn't enough time, I guarantee you, if car theft had gone up by more than 50% in the last five years, the insurance industry would be telling us a very different story.
Their next excuse was that although car theft is down, insurers were actually paying out more, because the cars have become much more expensive. Except, the fact is that they are actually paying out less. Between the 4th quarter of 1990 and the 3rd quarter of 1995 -- the last quarter for which statistics are available -- insurance company payments for comprehensive auto claims decreased by 17%.
Moreover, during the same period, insurance company profits rose from around 8% to 12%. So it isn't hard to see where that extra money is going. It is going straight from the pockets of hard-working New Yorkers and into the pockets of the auto insurance companies.
Here in New York City, we have devoted a great deal of time and effort to reducing crime. In the last two and a half years we have seen crime go down city-wide by 36%. In 1994, we initiated a crime strategy specifically designed to reduce car theft. Thanks to these combined efforts, we have been able to bring the rate of car theft down to a level the city hasn't seen since 1974.
And although it might be too much to expect our insurance premiums to go down to 1974 levels as well, it isn't too much to expect that the auto insurance industry recognize the dramatic results that we have achieved, and reward New Yorkers accordingly.
Even as we speak, the insurance industry has asked the State for another 4% increase in auto insurance rates. However, armed with this new study, State Senator Guy Velella, who chairs the State Senate Committee on Insurance, has vowed to bring auto insurers before the committee and force them to explain why we haven't seen our premiums go down.
And in the very near future, I will be appointing a Mayoral task force to ensure that this problem gets resolved.
I would like to thank the Consumer Affairs Department, and Commissioner Jose Maldonado, for preparing this very insightful report. And I would like to thank Police Commissioner Howard Safir and all of the men and women of the NYPD for their outstanding efforts reducing crime in our city.
Now it's time for the insurers to step up to the plate and do the right thing for the citizens of New York. It is time for our auto insurance premiums to reflect the fact that we now live in a much safer city. And next ... we're going to take a look at home owners insurance.
From Gracie Mansion, this is Rudy Giuliani.