NJ auto insurance rates could soar for 1M drivers under new bills, opponents warn

Auto insurance reform legislation that sponsors say will help more than a million New Jersey drivers pay more than a million dollars every year in premiums and opponents warn.

A bill that cleared a key state Senate committee Monday that would require drivers to choose a state with a minimum of $ 250,000 in personal injury protection, called PIP – up to the current lowest rate of $ 15,000.

Another prohibit motorists using private health insurance coverage as the primary payer for an auto insurance discount.

The proposed reforms of the Sponsors, including State Senate President Nicholas Scutari, a Democrat, and Sen. Jon Bramnick, a Republican, says they crashed into those hurt for long. But opponents say it will lead to skyrocketing costs and fewer insured drivers on New Jersey’s roads.

“If you are currently enjoying a healthcare discount and you have $ 15,000 PIP and you’re now moving from secondary $ 15,000, PIP to primary $ 250,000 PIP, you’re looking at a premium increase of about $ 650 a year,” Rory Whelan The National Association of Mutual Insurance Companies told the lawmakers at a committee hearing on the bills Monday.

There are 1.27 million New Jersey drivers who take advantage of a health insurance discount and 46% of drivers opt for less than $ 250,000 of personal injury protection, Whelan said.

Whelan estimates that motorists who are currently purchasing $ 15,000 PIP who keep auto insurance as their primary coverage “could see as much as $ 350 per year,” he said.

“It makes insurance even more unaffordable for many, many New Jersey residents,” said Chuck Bell of Consumer Reports lawmakers. “People are not going to be able to handle such sharp increases and as a consequence, many more people will have coverage without the drive.”

The two bills could make rates as high as 90%, he said.

“I just think that this is really going in the wrong direction, with inflation,” Bell said.

The legislation for But Advocates says the current system is flawed and needs to be revamped.

“All we’ve been saying is that the increase in limits for people who have been hurt and get some benefits (insurance companies) has taken them away for 25 years,” said Branmick, R-Union.

Bramnick, an attorney, says he regularly sees clients who are badly affected by car accidents and are shocked to find only $ 15,000 – even less if the deductible is taken into account – and many times that The full cost of the injuries.

“Happens all the time. How often do I see it? All the time, ”he said.

And while people can always sue the driver with a lower personal injury protection policy, it’s more likely to go now, Bramnick said. The driver probably doesn’t have enough assets.

“Most of the policies out there are cars out there for only $ 15,000,” Bramnick said.

But opponents disagree.

“That person is not able to fully recover from their costs and the other driver has an underinsured and uninsured motorist coverage. of New Jersey, said.

“Auto insurance is a system designed to protect the assets of each policyholder. It’s not a system of compensation for accident victims, ”added Christine O’Brien, president of the Insurance Council of New Jersey.

The Senate Committee on Monday said that another group of drunken drivers were killed by accident. In these cases it would eliminate the verbal threshold, which spells out which injuries are eligible for lawsuits.

Opponents of the package argue that this shows at least part of the intent of the reforms to benefit personal injury attorneys.

“New Jersey drivers who are seriously involved in an accident, such as a driver who is drunk or reckless, may be involved in cases of death, dismemberment, significant disfigurement, restoring displaced fractures, loss of a fetus or permanent injury, and so forth. Out of the statute, I’m quoting, they are already able to sue for pain and suffering above and beyond the verbal threshold, ”LaSpisa said. “This legislation is practically the only effect of soft tissue and minor injuries.”

O’Brien added: “The bills of the one supported group are the New Jersey Association for Justice, which is a plaintiff’s attorney, so to speak, about personal injury attorneys.

But O’Brien agreed that $ 15,000 personal injury protection is the minimum number and the minimum for lawmakers to increase the minimum amount of work.

Like Bramnick, Scutari is an attorney.

“These are common-sense reforms that protect consumers from the insurance companies,” Scutari, D-Union, said. “New Jersey continues to have the lowest minimum coverage limits in the country and they haven’t increased in 50 years. We are reforms for long overdue. ”

Scutari did not return a message for comment against the backlash. But he was asked about the insurance package – and in particular, his day job as a personal injury lawyer – by reporters last Thursday.

“My day job is here now,” Scutari said. “That’s a consumer protection package. That package of bills attempts to protect consumers from the ills of society – protect them against insurance companies that do not have their best interests at heart – but make sure that government protects people from making bad decisions. Because people just do what we tell them to do. ”

He added: “New Jersey has the lowest amount of liability coverage in the nation. We are dead last. We shouldn’t be dead last. We’re one of the richest states in the union. Should we not have more basic, minimum coverage? What ends up happening: Taxpayers are footing the bill for this. People are getting devastating accidents, their cars are not fixed, and their medical bills are not paid – we’re all for it. We have to make sure we protect all those people. ”

When an attorney for his job, Scutari said: “I don’t think so. I hope they have an impact on the members of the society who are involved in serious, horrific decisions. ”

As a lawyer, Bramnick conceded that his clients would be eligible for more medical expenses if they had a crash. But he said that’s not the reason he sponsored the bill. He got behind it because he has insurance companies that have gone too far and scrapped the benefits of scaling back.

“It’s not all about me,” Bramnick said. “I’m going to fight for the victim.”

In the meantime, opponents of the bill say it will be increasingly damaging to non-white drivers who are already hurt by current practices.

“Our primary issue has been and will remain the disproportionate impact of discriminatory rating practices that are still used by auto insurers in this state,” he said. The color of low-income residents and disproportionately impacted communities, ”said Maura Collinsgru, director of New Jersey Citizen Action for Policy and Advocacy.

Another bill in the reform package would raise the minimum amount of liability coverage for commercial vehicles to $ 1. 5 million.

The package passed the state legislature’s committee with bi-partisan support. Robert Singer, who said the commercial vehicles on bill “will destroy small business owners.”

“I guess we don’t care about small businesses,” Singer, R-Ocean, said.

The Bills would need to pass both the full Senate and Assembly and be signed by Gov. Phil Murphy to Become Law.

NJ Advance Media staff writer Brent Johnson contributed to this report.

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Matt Arco may be reached at [email protected]. Follow him on Twitter @MatthewArco.

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