Murphy signs costly auto insurance law that will affect 1.1M N.J. drivers

Published: Aug. 07, 2022

More than 1 million New Jersey drivers will likely pay more to insure their vehicles after Gov. Phil Murphy on Friday signed a controversial bill into law.

The measure will hike the minimum amount of liability insurance in the Garden State from its current $15,000 coverage to $25,000 beginning in 2023, and a minimum of $35,000 starting in 2026. Industry officials said about 1.1 million drivers will pay roughly $125 more each year.

Proponents of the measure have argued victims of crashes haven’t always been able to have their medical bills covered in full because of the low coverage option. Also, they say insurers have conceded the price hike wouldn’t go into effect until at least 2026.

It passed the state Senate last month by a 25-13 vote without any discussion and by 44-29 in the Assembly after it hit a minor speedbump when two Republican lawmakers spoke against it. They cleared both Democratic-controlled chambers largely along party lines.

“This is a really, really bad bill,” Assemblyman Robert Auth, R-Bergen, said at the time. “Let’s give the poor, middle class, and working-class families in New Jersey a break for crying out loud. Give them a damn break.”

The law Murphy signed was a pared-down reform bill that state Senate President Nicholas Scutari, D-Union, initially hoped to have passed.

Scutari sponsored more than a half-dozen bills that opponents warned would force 1.27 million drivers to pay as much as $350 more a year.

His original measures would have required drivers to select plans with a minimum of $250,000 in personal injury protection, commonly called PIP. Another bill would prohibit motorists from using private health insurance coverage as the primary payer for personal injury protection coverage in exchange for an auto insurance discount.

A group that represents insurers, the Insurance Council of New Jersey, agreed with raising minimum coverage to $25,000 but opposed the bill because of the automatic increase in 2026. The average cost of a claim with injuries is $18,000, according to the group.

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published this page in News and Politics 2022-08-08 02:59:51 -0700