NJ lawmakers opt out of expensive car insurance plan, but 1 million could still pay more

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New Jersey lawmakers appear to have reached agreement on a streamlined auto insurance reform bill after a costlier proposal for New Jersey drivers was blocked.

However, more than a million people would pay even more each year if the latest bill were enacted.

An Assembly committee on Thursday approved legislation that would increase the minimum amount of liability insurance from its current coverage of $15,000 to $25,000 starting in 2023, and to a minimum of $35,000 starting in 2026.

If passed by both houses and signed into law by Governor Phil Murphy, 1.1 million New Jersey drivers — or about 20% currently on the road — could expect to pay $120 to $130 in additional coverage. per year, both supporters and opponents of the said Bill.

The bill’s main sponsor in the lower house, Assemblyman Lou Greenwald, D-Camden, did not respond to multiple calls for comment. But a GOP sponsor of a similar measure, State Senator Jon Bramnick, and a legislative source with knowledge of the negotiations agreed that this bill is most likely to hit the governor’s office instead of a broader package that opponents say would force 1.27 million drivers to pay up to $350 more a year.

“I’m not optimistic,” Bramnick, R-Union, said of his bills passing.

The original package that cleared a Senate committee on Monday would have required Garden State drivers to select plans with a minimum of $250,000 in injury protection, commonly known as PIP. Another bill would prohibit motorists from using private health insurance as the primary payer for injury protection coverage in exchange for a car insurance discount.

Bramnick, who says the reforms are long overdue to help accident victims, backed the measures with the state’s top lawmaker, Senate Speaker Nicholas Scutari.

“All I want to see is an effort to help policyholders – that’s it. And I haven’t seen it in decades,” Bramnick said. “I’m proud of what I’m doing and I’ll take the heat Insurance companies are not the Red Cross.

He called the Assembly bill a “fair compromise” and one that he would support in the Senate.

Insurers and other advocacy groups have warned that the broader proposal would lead to fewer insured drivers on New Jersey roads because they could not afford it.

Gary LaSpisa, vice chairman of the New Jersey Insurance Board, supported increasing the minimum coverage to $25,000. But his group opposed the bill on Thursday because of the additional increase expected three years later.

“I still think we’ll see a spike in uninsured motorists because some people just can’t afford even the $130 we’re talking about,” LaSpisa said. “We can’t say that just because we reduced the impact we eliminated the impact, and I think we should be clear about that.”

He said the previous version would have been “calamitous” for drivers.

Bramnick, an attorney, says he regularly sees clients who are seriously injured in car accidents and are shocked to find they are only entitled to $15,000 – even less if the deductible is taken into account. – and often this does not come close to covering the full cost of injuries.

The average settlement is $18,000, LaSpisa said.

“We had contacted the President of the Senate when this bill was introduced to discuss the increase to $25,000 … to keep up with the increase in the average settlement,” he said.

Scutari did not return a call for comment.

The bill passed the Democratic-controlled House committee with a 7-5 vote along party lines.

“The timing is wrong,” said MP Robert Auth, R-Bergen. “We have had countless people who have come here and explained what the difficulties are to various state stakeholders and we are not listening. We know better than the public, we know better than the people who testify, and we have to make sure certain industries are supported. I think that is reprehensible.

Even some Democrats have expressed skepticism about whether they plan to vote for it when it reaches the Plenary, as the price has soared and inflation is at its highest in decades.

“My only concern is timing,” said MP John McKeon, chairman of the committee. He recalled his time as mayor of West Orange when the city raised local pool fees by $10.

“I never forget being so embarrassed (when he said) ‘Come on everyone, it’s only $10,'” McKeon, D-Essex, said. “Everyone looked at me and said, ‘You don’t understand,’ and I always remembered that.”

He added: “The fact is, with few exceptions, the one million policyholders, the 20% who have minimum cover, are the ones who can least afford it. And that’s another $120 out of pocket. And that’s why I have significant concerns.

Assemblyman Joe Danielsen was more vocal in his opposition.

“I would like to understand why we are doing this now,” said Danielsen, D-Somerset. “As of today, I do not intend to vote for this on the floor.”

Ferlanda Fox Nixon, chief of policy and government affairs for the New Jersey African American Chamber of Commerce, urged lawmakers not to diminish what an extra $10 a month means for some New Jerseyans.

“For some people, ‘just $10 a month’ is a lot of money,” she said. “We’re talking about a group of people who have very limited disposable income… (and) a group of people who generally don’t work from home.”

The bill that was passed by the Assembly committee only dealt with liability insurance, not PIP. Nor did it include other measures put forward in the Senate that would have relaxed the rules for prosecuting crash victims injured by drunk drivers. In those cases, it would have eliminated the verbal threshold, which specifies which injuries are eligible for prosecution.

Opponents argued this showed that at least part of the intent of the reforms was to benefit personal injury lawyers.

They said if the original bill package becomes law, it could force drivers to pay up to $350 more each year.

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matt arco can be attached to marco@njadvancemedia.com. Follow him on Twitter at @MatthieuArco.

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