Already plagued by the highest automobile insurance rates in the U.S., New Jersey drivers were stunned last week by the defection of their No. 1 insurance company. In the largest withdrawal of an insurer from a state market, Allstate said it was dropping out of the property-and-casualty business in New Jersey. The insurer argued that excessive regulation had held down premiums despite the rising cost of paying claims. As a result, Allstate said, it lost $72 million on New Jersey auto policies last year.
The final crack-up came last spring when the New Jersey Supreme Court upheld a law that required...
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