New Jersey auto insurance will raise the minimum liability insurance limit to $35,000.
As a result, insurance premiums for the 1.1 million auto insurance subscribers are expected to inevitably increase.
New Jersey Governor Phil Murphy signed a bill that would raise the minimum limit for auto insurance companies’ liability and damages caused by uninsured drivers from $15,000 to $35,000.
The minimum compensation limit will be raised to $25,000 in 2023 and then raised to $35,000 in 2026 in stages.
The insurance industry expects the legislation will add $125 more each year to the insurance premiums of about 1.1 million New Jersey auto insurance subscribers.
Rep. Robert Earth, a Republican who has opposed the bill, called it “evil law that places a financial burden on New Jersey’s low-income, middle-class and working-class families.”
On the other hand, supporters said, “The minimum compensation limit for car insurance has been too low, so even if an accident occurs, the necessary medical expenses have not been sufficiently paid. Reform of the outdated system is necessary to protect victims of car accidents.”
However, the insurance industry believes that the average amount of claims for injuries in New Jersey is about $18,000, and that raising the minimum compensation limit to $35,000 is too much.
The law, initiated by State Senate Speaker Nick Scutari, raises the minimum amount of personal injury protection (PIP) in car insurance to $250,000, and provides compensation for medical expenses in case of a traffic accident to the personal health of the insured, not the car insurance company. The main goal was to prohibit claims to insurance companies first. (Reported on page A3 of this report on June 22)
However, during legislative discussions, criticism for causing excessive increases in insurance premiums became fierce, and eventually the policy was turned to raising the minimum limit of liability insurance.
Meanwhile, Governor Murphy also signed legislation (S-1368) requiring business owners or landlords to maintain liability insurance coverage of at least $500,000 in case of injury or death on rental properties.