PIANJ and Assemblyman McKeon discuss ‘step-down’ provisions

February 3, 2021

Members of PIANJ met with Assemblyman John McKeon, D-27, chairman of the Assembly Financial Institutions and Insurance Committee, yesterday to discuss the issue of step-down provisions in personal auto policies—one of PIANJ’s top legislative priorities. The conversation took place over video conferencing.

Some insurance carriers have begun placing what is colloquially known as “step-down” provisions in their personal automobile policies. In an auto policy, a step-down provision acts to reduce the amount of insurance coverage available to policyholders compared to the original agreement. Essentially, policyholders will think they have more coverage than they actually do. Typically, these provisions are triggered when insureds use their personal vehicle to make deliveries of any kind. When that occurs, the policyholders may lose the insurance coverage they bargained for, and instead only receive what is required under New Jersey’s financial responsibility law. Currently, that minimum is $15,000 per person, with a total maximum of $30,000 per incident.

The COVID-19 pandemic has changed many things in society. With numerous executive orders either forcing businesses to close to the public or drastically reducing their occupancy, many businesses that had never offered delivery before, turned to it out of necessity. This presents the risk that policyholders could be driving around with far less coverage than they had paid for or intended.

PIANJ will continue to work with the McKeon as well as elected officials throughout the state to rectify this vital issue.

Attending the meeting from PIANJ were Michael DeStasio Jr., TRIP, PIANJ president-elect; Lydia Bashwiner Esq., CWCP, NJWCP, PIANJ director and chair of the Legislative/Regulatory Committee; John A. Latimer, Esq., past president; Carol Katz and Adam Guziejewski, PIANJ’s legislative representatives; and Bradford J. Lachut, Esq., PIANJ director of Government and Industry Affairs.

Assemblyman McKeon was accompanied by his chief of staff, Alex Keiser.

Celebrating 40 Years with Berkshire Hathaway GUARD Insurance Companies.

About the author…

Bradford J. Lachut, Esq.

Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.

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