Murphy approves of higher car insurance coverage requirements


Auto insurance policies will have to provide greater liability, protection for uninsured and underinsured motorists after Governor Phil Murphy signed a bill increasing minimum coverage requirements.

Murphy’s action on Senate Bill 481/Assembly Bill 4291 arrived late on August 5, one of many measures approved that day. The measure cleared both houses of the Legislative Assembly on June 29.

Under the new law, the minimum amount of liability coverage increases from $15,000 to $25,000 beginning in 2023, and a minimum of $35,000 beginning in 2026. The floor for uninsured motorist coverage and underinsured motorists increases to $50,000 for an accident causing bodily injury or death to a single person and to $100,000 for an accident causing injury or death to more than one person.

John Harmon, CEO and President of the New Jersey African American Chamber of Commerce.

In addition, the policies must provide liability coverage of at least $50,000 in the event of injury or death to any person in any accident; $100,000 for the injury or death of more than one person in the same accident; and an amount of $25,000, excluding interest for property damage in a single accident.

Supporters, including State Senate Speaker Nicholas Scutari, D-22nd District lead sponsor, said higher minimums were needed to protect crash victims. Scutari has argued that taxpayers often end up paying the costs associated with undercovered drivers.

Senate Speaker Nicholas Scutari, D-22nd District. – NJ SENATE DEMOCRATS

But opponents, led by John Harmon, president of the New Jersey African-American Chamber of Commerce, argued the measure would impose unnecessarily higher costs on drivers who don’t need the extra coverage and can’t allow it. “We’re forcing people to make choices that aren’t good for anyone,” Harmon told NJBIZ in an interview shortly after the bill landed on Murphy’s desk.

Scutari argued that regulators and market pressures will prevent insurers from raising rates in conjunction with the new limits. But Eric Poe, CEO of CURE Auto Insurance, said insurers have already asked for higher rates and the Department of Banking and Insurance will not deny increases to companies that can show they are necessary to cover costs. . “So if I offer more insurance, of course it will cost us more money that we have to pass on to stay in business,” he said. If I show that I’m losing $10,000 a year for a specific coverage, the Department of Insurance can’t deny it, they can only deny whether my statistics are in fact valid or not.

The law takes effect immediately.


Comments are closed.