Murphy to decide on more costly auto insurance plan that would affect 1.1M N.J. drivers

Published: Jun. 29, 2022

More than 1 million New Jersey drivers could see their insurance rates increase after legislation to reform the industry sped through the state Legislature on Wednesday.

The bill would 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 if Gov. Phil Murphy signs it into law.

The measure passed in the state Senate by a 25-13 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 chambers largely along party lines.

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.

Other groups opposed the bill, citing its timing. They argued lawmakers shouldn’t make it more expensive to drive in the state while inflation is high and the cost of living is on the rise.

“We have gasoline at $5 a gallon and now we’re going to force New Jersey motorists to pony up more money?” Assemblyman Robert Auth, R-Bergen, asked ahead of the measure passing the Assembly.

“This is a really, really bad bill,” Auth added. “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.”

Auth accused the drivers of the legislation of being a “small cadre of attorneys.”

The bill’s main sponsors in the Assembly and Senate are all attorneys.

“Why the urgency?” John Harmon, president and CEO of the African American Chamber of Commerce of New Jersey, asked during an interview with NJ Advance Media Tuesday. “Could we not pull this back and do some impact studies?”

Harmon argued Black and brown New Jerseyans would disproportionately be affected by the bill and said he was surprised to not hear the bill’s sponsors before the measure headed to the Legislature for a vote.

“We’re definitely open to a compromise but we weren’t afforded the opportunity to have that conversation,” Harmon said. “Why is this so important to him versus all the other things going?”

The legislation is 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.

They all passed in a Senate committee last week but were apparently dropped in the face of backlash.

Scutari gave a fiery defense of the legislation when it was voted on in a Senate committee Monday, saying taxpayers are the ones who are stuck with the costs to “subsidize unpaid medical bills” and “everything that the insurance industry doesn’t cover” in the minimum policy.

“The people of New Jersey need this Legislature to protect them from themselves because we tell them what they need to get, and that’s what they get,” Scutari, said.

Do you like this post?

Showing 1 reaction

published this page in News and Politics 2022-06-30 03:28:05 -0700