While reforms seem to be taming New Jersey's chronically high auto insurance rates, a new problem has arisen: Owners of buses and other commercial vehicles say their bills have skyrocketed in recent years.

Bus operators large and small say that in some areas of the state, insurance rates can reach $50,000 per year and some can't get coverage at all. Minority bus owners say they have been particularly hard hit, with some being driven out of business. Cab drivers complain they pay rates that dwarf those paid by ordinary drivers.

"We're out of business," said Nate Lawson, owner of Nate's Transportation in Newark, who stopping running his own buses in 2005 after more than two decades when his premiums shot up. "We can't even buy insurance. That is total discrimination."

Assemblyman Neil Cohen, who chairs the lower house's insurance committee, is sponsoring legislation that would scale back required commercial insurance coverage to reduce rates. The bill cleared Cohen's committee last Thursday, and he announced he will hold a hearing in September on the cost of commercial insurance, and why some can't get coverage.

"There are some small companies literally going out of business," said Cohen (D-Union). "It's time to take a hard look."

Carol Katz, lobbyist for the Bus Association of New Jersey, said her members, which include large bus companies like Coach USA and Academy, estimate their average insurance costs have risen from about $12,000 per bus in 2001 to about $35,000 — just for liability and medical coverage. She said collision coverage adds another $7,500 to $15,000 per bus.

Even a cab driver in New Jersey can pay as much as $10,000 annually for full coverage, said Charley Martini, a longtime insurance executive who may form a company to sell coverage to taxi owners. They now can buy policies from only one private company and a state-run insurance pool, he said.

In contrast, insuring an automobile in New Jersey costs an average $1,185 in 2005, according to the latest available figures. Though that's still highest in the nation, the rates fell 3.3 percent because of recent reforms.

Insurance industry officials question whether rates are as high as critics claim, but acknowledge they are more expensive in New Jersey than other states because of the high population density and a legal requirement that bus owners buy broader coverage.

John Petrilli, vice president and general counsel for Lancer Insurance of Long Beach, N.Y., which insures more buses in New Jersey than any other private operator, said prices rose around 2001 but his company has charged an average of $9,300, not counting collision, over the past five years.

Katz said her members wish they could find rates that cheap.

Insurers concede many don't offer bus insurance, saying buses tend to be magnets for nuisance claims, fraud and big payouts.

"It is highly specialized and very few companies have found they can underwrite it effectively," said David Snyder, vice president of the American Insurance Association.

Some minority-owned firms feel they may be victims of racism and say they're being forced out of New Jersey. Two bus company owners, Lawson and Curtis Dukes of Irvington, recently filed civil rights complaints with the U.S. Attorney's Office contending they are being targeted because of race.

Oscar Bennett, who owns Queen City Tours Inc. of Plainfield, said he operated buses for 28 years without a major accident. From 2002 to 2005 his insurance bill went from $6,800 to $57,333 per bus. He later found cheaper insurance, but by last year, could no longer get coverage.

"Nobody would insure me. But I would match my safety record against any company in the United States," he said.

Bennett said he's already lost his house and is struggling to maintain ownership of his bus lot in Plainfield. He said he was forced to lease his vehicles to his cousin in North Carolina, where they are registered and insured — at about $7,000 per bus.

Bennett filed a complaint with the state insurance department after Lancer Insurance refused to write a policy. The insurer said they refused coverage because he violated federal transportation safety regulations and was canceled by a previous insurer for not paying his bills. Bennett said he did have trouble paying some bills after they rose so quickly, and that the safety violations were technical and minor.

New Jersey does have an "insurer of last resort" for some who cannot find policies on the open market, but its rates aren't cheap: $42,815 to insure a charter bus in Newark with 21 to 60 seats, not including physical damage coverage, according to William Rader, assistant commissioner of the Department of Banking and Insurance.

Unlike the private passenger market, which remained under tight state control until 2003, the commercial market has been largely deregulated since 1982.

Cohen said he is aiming at one of the rules the state does have: requiring bus owners to pay up to $250,000 of the medical bills of any driver injured in an accident.

His bill (A1973) would make injured passengers tap their own auto or health insurance policies for the first $10,000 in medical bills from a bus accident. Bus companies would have to pay any remaining costs up to $250,000. Katz said this would lower insurance costs because most medical claims are under $10,000.

Bus accidents and fatalities have fallen in New Jersey in recent years, according to federal data.

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