(Bloomberg) — California is the only U.S. state where the cost of auto insurance decreased over two decades through 2010, according to a consumer group that attributes the decline to a law that gave regulators more control over rates.

Californians spent $746 on average in 2010, $2 less than in 1989, the year after voters gave more power to the state’s watchdog, the Consumer Federation of America said in a statement today. Americans spent $791 on average for auto insurance in 2010, up 43% from 1989.

The voter proposition empowered the state’s insurance regulator to approve rate increases before they were enacted. It also required insurers to make more data public and enabled consumer groups to request hearings on company proposals.

“No other state has put in place the kind of strong oversight that California voters created in 1988, and no other state has seen auto insurance prices decline,” says J. Robert Hunter, insurance director for the federation.

Nebraska, Louisiana and Montana all had their rates go up at least 90% from 1989 to 2010, the CFA says, citing data from the National Association of Insurance Commissioners. New Jersey, New Hampshire and Hawaii had increases of less than 20%. The average climbed 62% in New York State.

The Insurance Information Institute says the federation is overstating the connection between the proposition and California’s rates. One reason motorists may be paying less there is that high gas taxes pushed drivers to buy smaller vehicles, which can cost less to insure, says Robert Hartwig, president of the institute. Competition also drives down rates in the most populous state, he said.

“The CFA routinely extols the virtues of this now decades-old piece of legislation,” Hartwig says. “The more important point to make is that the cost of auto insurance has grown at a cost below the rate of inflation” in the U.S.

Increased urbanization may have added to risks in states like Nebraska, and natural disasters such as Hurricane Katrina in 2005 contributed to higher rates in Louisiana, he says.

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