Lawmakers could review car insurance minimums

New Jersey lawmakers could revisit raising some auto insurance coverage minimums after most bills in a reform package championed by Senate Speaker Nicholas Scutari failed to advance this summer.

Sen. Joe Lagana (D-Bergen) presented on Monday a bill that would require auto insurance policies to include at least $50,000 in bodily injury protection coverage, compared to $15,000 under current law.

Lagana said the goal is to protect people injured in auto accidents who cannot afford to pay their medical bills. Scutari has previously said New Jersey’s current requirements are so weak that they force taxpayers to subsidize victims’ unpaid medical bills.

“I’ve seen people spend two months with a chiropractor, get an MRI and maybe an epidural injection for a herniated disc and spend $15,000. I’ve seen people not get out of the hospital without spending $15,000,” Lagana, an attorney, said in an interview. “The amount of premium a person pays – which is not low – for really below average medical coverage is not really appropriate, I think.

The introduction of the bill comes after the Legislative Assembly approved and Governor Phil Murphy in August signed a separate invoicesponsored by Scutari, which sets new lows for bodily injury liability and uninsured/underinsured motorist coverage.

These changes will require auto insurance policies to provide at least $25,000 in bodily injury liability coverage – which is intended to pay for injuries sustained by others as a result of an accident caused by the policyholder. insurance – by 2023 and $35,000 by 2026. Industry officials said this would add about $125 to auto insurance premiums for New Jersey residents.

Personal injury protection pays for injuries sustained by the policyholder. One of the bills in Scutari’s package that did not pass the Legislative Assembly would have raised those minimums to $250,000.

Insurance industry groups have criticized the bills, saying they would increase costs for policyholders.

“All of these legislative changes that we’re seeing will impact the bottom line of any young driver and any new driver,” said Christine O’Brien, president of the Insurance Council of New Jersey.

She said the state should hold off on further regulatory changes until after 2026, when it’s clear what effect the law Murphy signed in August has had on premiums. At least, she said, they should stick to any new changes until the end of the current legislative session.

Lagana said he expects the bill to have a modest impact on premiums, but acknowledged that ongoing affordability issues in the state could make a delay reasonable.

“I’m going to sit down with them and see what kind of timing we can put on this. Maybe it will become effective after a year or two,” he said. “I’m certainly willing to work with them as we process other changes that have been implemented.”

It is not yet clear exactly how a change in insurance coverage minimums will affect premiums, although it will likely result in at least a slight increase, as a significant number of policyholders are forced by regulations to switch to plans offering greater coverage.

New Jersey drivers must have basic or standard auto insurance policies. About 2.1 million policyholders held a standard auto insurance plan with $15,000 in injury protection coverage at the end of last year, according to a semiannual report by the Department of Banking and Insurance. That’s about 36% of all standard auto plans in the state.

All other drivers with standard plans held at least $50,000 in personal injury protection coverage.

Basic plans are for new drivers and others who can’t afford or don’t want the broader coverage offered by a standard plan. The report said 43,584 policyholders in New Jersey had a Basic Auto Plan, which provides up to $15,000 in bodily injury protection under current law.

Lagana acknowledged that the potential increase in the cost of a basic plan is a potential drag on the bill.

“People choosing basic policies, I just assume there’s an affordability issue, so I’m aware of that,” Lagana said. “But standard policies, there may not be affordability issues with people. Maybe they just don’t know they’re making the wrong decision with $15,000.

O’Brien said basic plans may become more common after New Jersey rolls out driver’s licenses for residents with Independent Taxpayer Identification Numbers, numbers that are typically used by immigrants who are not not citizens and do not have a social security number. The Motor Vehicle Commission began accepting applications for such licenses last May.

“We welcome a whole new population of drivers, a population of legal drivers. What can they afford? said O’Brien. “It’s a balance. I’m not saying it’s an easy balance to strike, which is why I think the legislature should approach with caution what the driving public can bear.

Get morning headlines delivered to your inbox