NJ auto insurance rates may skyrocket under these bills

NEW JERSEY — A new set of bills in the New Jersey legislature approved Monday by the Senate Commerce Committee aim to increase consumer protections for motorists, including requiring drivers to sign up for plans with higher premiums.

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

Other bills, S2031/S2254, would prohibit drivers from using private health insurance as the primary payer for bodily injury coverage in exchange for a discount on car insurance. According to a statement from New Jersey Senate Democrats, motorists who choose their health insurance as their primary insurance are resulting in many unpaid bills.

“These are common sense reforms to protect consumers from insurance companies,” said New Jersey Senator Nick Scutari, who sponsored the legislation. “New Jersey continues to have the lowest minimum coverage limits in the nation and they haven’t been increased in 50 years. We’ve been waiting for reform for a long time.”

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

“People won’t be able to handle such large increases and as a result many more people will be driving without coverage,” Bell said, adding that rates could go up to 90% due to bills.

The bill 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 businesses protect their employees from liability as well as motorists”.

Other bills approved by the committee include S467, which would provide that liability limitations will not apply to accidents caused by drunk or reckless drivers, and S481, which would require auto insurance policies provide minimum amounts of coverage for liability, uninsured motorists and underinsured motorists.

“We need stronger safeguards for consumers so that policyholders are not denied the rights and compensation they deserve,” Senator Scutari said. “Accident victims are now under-protected and taxpayers have to foot the bill. These reforms will help consumers and taxpayers alike.”

The bills must pass the Senate and State Assembly before Governor Phil Murphy signs the legislation into effect.