Legislative priorities: Advancing fairness, consumer protection in New Jersey

The PIANJ has set an ambitious legislative agenda for the 2024-25 session, championing reforms that promote fairness, transparency and consumer protection. By advocating for key legislative changes, PIANJ continues its mission of supporting insurance professionals, their businesses and the insurance-buying public. Here’s a closer look at PIANJ’s priorities for this session.

Ban step-down clauses in auto insurance policies

Step-down clauses in personal auto insurance policies have long been a source of frustration for policyholders. These clauses reduce liability coverage to New Jersey’s minimum state limits—$25,000 per person and $50,000 per accident—in specific situations, even when higher limits have been purchased.

For example, if a family member or friend drives the insured vehicle and gets into an accident, the coverage could unexpectedly revert to these minimal limits, leaving drivers and passengers with insufficient protection. Such scenarios betray the reasonable expectation that auto insurance follows the vehicle, not the individual.

PIANJ advocates for legislation to eliminate step-down clauses in personal auto policies. Banning these restrictive provisions would protect consumers from unexpected gaps in coverage, reinforce trust in the insurance process, and ensure that policyholders receive the full benefits of the coverage they pay for.

Regulate third-party litigation funding

Third-party litigation funding—or lawsuit lending—has become increasingly common, and controversial. While it provides plaintiffs with financial support during protracted legal cases, the lack of regulation in this space often leads to predatory practices, including excessive interest rates.

PIANJ supports legislative measures to regulate lawsuit lending, ensuring that these agreements are fair and transparent. By protecting plaintiffs from exploitation, such regulation would foster a more equitable legal system, balancing the needs of injured parties with efforts to control legal costs and stabilize insurance premiums.

Establish insurance requirements for e-bikes and scooters

As e-bikes and e-scooters become integral to urban and suburban transportation, accidents involving these vehicles have surged. According to the Consumer Product Safety Commission, these incidents resulted in nearly 250,000 emergency room visits and over 200 fatalities between 2017-22.

PIANJ advocates for a comprehensive insurance framework for e-bikes and e-scooters. This would ensure that operators have adequate liability coverage, protecting themselves and others in case of an accident. As these vehicles continue to gain popularity, such measures are essential for safeguarding public safety and ensuring financial responsibility.

Enable comparative negligence defenses for producers

Under current New Jersey law, insurance producers face unique challenges when defending themselves in professional malpractice cases. While most civil litigants can assert a comparative negligence defense, producers with a “special relationship” with a client often are prohibited from doing so.

To complicate matters, state courts lack a consistent test for determining when such a relationship exists, creating uncertainty and inconsistent legal standards for insurance agents.

PIANJ supports legislation to allow producers to assert comparative negligence defenses, even when a special relationship is established. This change would create a level playing field for producers, ensuring they can effectively defend themselves while preserving plaintiffs’ ability to seek remedies.

A strong industry advocacy agenda for New Jersey

Through its 2024-25 legislative priorities, PIANJ is addressing critical issues that impact insurance professionals and consumers alike. From banning step-down clauses to establishing clearer guidelines for e-bike insurance, these initiatives reflect a commitment to fairness, transparency and accountability.

By working closely with lawmakers and educating policymakers, PIANJ is paving the way for meaningful reforms that benefit the entire insurance ecosystem. Stay tuned for updates on these initiatives and PIANJ’s continued advocacy efforts.