NJ Auto Insurance Rates May Skyrocket Under These Bills

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NEW JERSEY – A new set of bills in the New Jersey legislature approved by the Senate Commerce Committee on Monday aims to increase motorists’ consumer protections, namely by requiring drivers to take on plans with higher premiums.

One component of the package, S471, would require drivers to choose plans with a minimum of $250,000 in personal injury protection and would eliminate certain personal injury protection options available under standard automobile insurance policies.

Other bills, S2031/S2254, would forbid drivers from using private health insurance coverage as the primary payer for personal injury coverage in exchange for an auto insurance discount. According to a statement from New Jersey Senate Democrats, motorists who choose their health insurance as their primary insurance results in many bills going unpaid.

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“These are common-sense reforms to protect consumers from the insurance companies,” said New Jersey Sen. President Nick Scutari, who sponsored the legislation. “New Jersey continues to have the lowest minimum coverage limits in the country and they haven’t been increased in 50 years. We are long overdue for reforms.”

However, critics warn that the protective hikes will only make insurance more unaffordable for New Jersey residents, particularly during periods of inflation, Chuck Bell of Consumer Reports told lawmakers, per NJ.com. Dissenters of the bill also include Sen. Robert Singer (R-30) and the Insurance Council of New Jersey, according to the publication.

“People are not going to be able to handle such sharp increases and as a consequence, many more people will drive without coverage,” Bell said, adding that rates could jump as much as 90% as a result of the bills.

The proposed legislation also targets commercial drivers with S2841, which would raise the minimum amount of liability coverage for commercial motor vehicles to $1,500,000 to “ensure that businesses are protecting their employees from liability as well as protecting motorists.”

Other bills approved by the committee include S467, which would provide that limitations on lawsuits won’t apply in accidents caused by drunk or reckless drivers, and S481, which would require automobile insurance policies to provide minimum amounts of coverage for liability, uninsured motorists and underinsured motorists.

“We need stronger consumer safeguards so policy holders aren’t denied the rights and compensation they deserve,” said Sen. Scutari. “Accident victims are now under-protected and the taxpayers are left to foot the bill. These reforms will help consumers and taxpayers.”

The bills must be passed by the state Senate and Assembly before Gov. Phil Murphy signs the legislation into effect.



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