While PIANJ may have faced challenges in advancing the association’s top priority—a ban on the use of step-down provisions in personal auto policies—your association’s efforts during the 2022-23 session were not in vain.
The organization has seen widespread success in advocating for and supporting a variety of other insurance-related bills. This includes landmark legislation to increase minimum auto insurance limits and enforce mandatory liability insurance for business and rental property owners, among others. PIANJ’s proactive stance and commitment to enhancing the insurance landscape in New Jersey have contributed significantly to the passing of these transformative laws.
Despite the setback with the step-down provisions, PIANJ’s achievements highlight its influential role in shaping state insurance policies, demonstrating its dedication to protecting and serving the interests of New Jersey citizens and the insurance community at large.
Increased auto insurance minimums
Perhaps the single biggest insurance bill to pass during the 2022-23 was S-481. Championed by Sen. Nicholas Scutari, D-22, and Assemblymember Louis Greenwald, D-6, the bill marks a pivotal shift in New Jersey’s auto insurance requirements. This new law will elevate the minimum coverage amounts in personal auto policies incrementally.
The initial rise to $25,000/$50,000/$25,000 took place on Jan. 1, 2023. A final adjustment to $35,000/$70,000/$25,000 is planned for Jan. 1, 2026. This structured increase emerged as a balanced compromise among policymakers, advocacy groups and insurance providers to address concerns over the financial impact on lower-income individuals and the readiness of insurance companies to adapt to these heightened minimums.
PIANJ stands out for its support of this amendment, aiming to better protect New Jerseyans amid escalating medical costs with higher coverage requirements.
Commercial auto insurance limits enhanced
Later in session, Sen. Scutari set his sights on increased commercial auto limits. A new law will adjust insurance coverage requirements for commercial and other motor vehicles in New Jersey. Going forward, commercial vehicles with a gross vehicle weight of more than 26,000 pounds are required to carry minimum limits of at least $1.5 million of liability coverage. Commercial vehicles with a gross vehicle weight rating of 10,001 or more pounds, but less than 26,001 pounds, will be required to carry at least $300,000 of liability coverage.
The law specifies that the new insurance requirements may be satisfied by a commercial automobile insurance policy, fleet insurance policy, commercial umbrella insurance policy, commercial excess insurance policy, similar insurance policy, or any combination thereof.
Mandatory liability insurance for business, rental properties
S-1368—also steered by Sen. Scutari, along with Assemblymember Raj Mukherji, D-32—requires mandatory liability insurance for business and rental property owners. This law mandates a minimum liability coverage of $500,000 for business owners to cover property damage and bodily injury or death in any single incident.
Owners of small rental properties, defined as multifamily homes with up to four units, are required to secure at least $300,000 in liability coverage. Compliance certificates must be filed with local municipalities, which are authorized to impose fines up to $5,000 on noncompliant properties.
Fire safety
Legislation, S-281/A-3791, sponsored by Sen. Linda Greenstein, D-14, Sen. Shirley Turner, D-8, and Assemblymember Shavonda Sumter, D-35, Assemblymember Verlina Reynolds-Jackson, D-15) addressed the installation of automatic fire sprinkler systems in newly constructed townhouses.
Recognizing the vital role of fire sprinklers in enhancing safety, this new law mandates that all new townhouse constructions include a comprehensive automatic fire sprinkler system. The intention is to minimize fire-related losses, ensuring a higher standard of safety in residential constructions.
Expanded workers’ compensation for public safety personnel
The state also addresses expansion of workers’ compensation benefits for public safety personnel. A-5909/S-4267, sponsored by Sen. Paul Sarlo, D-36, Sen. Steven Oroho, R-24, Assemblymember Wayne DeAngelo, D-14, Assemblymember Carol Murphy, D-7, Assemblymember F. Parker Space, R-24, and Assemblymember Hal Wirths, R-24, revises workers’ compensation coverage for certain injuries sustained by volunteer and professional public safety and law enforcement personnel.
The law, in part, adds part-time and volunteer firefighters, police officers and first-aid or rescue squad members as employees eligible for workers’ compensation benefits. It aims to broaden the scope of coverage and ensure that these individuals—who often work in high-risk environments—are protected under workers’ compensation laws adequately.
New Jersey’s handgun liability insurance requirement
The U.S. Supreme Court issued a decision in New York State Rifle & Pistol Association v. Bruen in 2022 holding that the “justifiable need standards,” which many states—including New Jersey—implemented to regulate the carrying of firearms in public was unconstitutional. That decision left New Jersey lawmakers scrambling to replace the state’s “justifiable need” law in favor of another method of regulation firearms. The result was legislation that would require any person in New Jersey who carries a handgun in public, to maintain liability insurance coverage.
Under the new law, any citizen who carries a handgun in public in the state must maintain liability insurance of at least $300,000, insuring against loss resulting from liability imposed by law for bodily injury, death, and property damage arising out of the ownership, maintenance, operation or use of a firearm carried in public. Prior versions of the bill required $100,000 of liability coverage, on account of injury to, or death of, one person, in any one incident and $300,000; on account of injury to, or death of, more than one person.
The insurance requirements of the new law were set to go into effect in July of 2023. However, before that time there was a challenge to question the constitutionality of the insurance mandate. The United States District Court for The District of New Jersey issued a decision on May 16, 2023, that will—at least temporarily—suspend enforcement of an insurance requirement for those applying for a firearm-carry permit for in the state. The court ruled that the insurance mandate was unconstitutional and unenforceable.
Understanding New Jersey’s credit card surcharge legislation
While not insurance specific, one new law—that will impact insurance agencies—prohibits businesses, including insurance agencies, from imposing certain surcharges on credit card transactions. The law prohibits a business (referred to as “sellers” in the law) from charging customers a surcharge for credit card transactions that exceed the actual cost to the business to process the credit card payment. For example, an agency that is charged 1.5% surcharge by a credit card company, can only charge 1.5% to its clients.
The law applies to all sellers in New Jersey. That term is broadly defined to mean a person who sells, leases or rents goods or services to a customer. In essence, any business that offers a good or service in the state is subject to the law. One caveat is that the law only applies to transactions occurring in New Jersey.
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.
