New York City - Crime, including car theft, is down here. In fact, there has been a 60 percent drop in car theft since 1990. So the city is wondering why its residents are paying higher auto insurance premiums.

To get the answers, the city has filed an unprecedented class action lawsuit on behalf of its 500,000 citizens who hold comprehensive auto insurance (38 percent of NYC car owners). The suit seeks millions of dollars in compensation from seven major insurance companies. The complaint, filed in the state Supreme Court, alleges that a "massive reduction in automobile theft" - from more than 145,000 in 1990 to under 60,000 in 1996 and still dropping - "should have been accompanied by an equally massive reduction in premiums forthe types of insurance that cover such losses. This is especially true since automobile theft represents nearly 80 percent of the losses paid under such insurance in New York City."

Data from the State Insurance Department indicates that the average annual premium paid by an adult male, age 35, increased as much as 51 percent from 1994 to 1996.

The catalyst for the action was an eight-month investigation by the city's Task Force on Insurance Rates.

The lawsuit was filed by Paul Crotty, corporation counsel for the city, and local firm Anderson Kill & Olick, which is representing the city on a pro bono basis.