Drivers in New Jersey may soon have greater protection against insurance rate hikes for accidents for which they are not at-fault. Bill S-3717 was drafted to amend the state’s Insurance Law to prevent automobile insurers from penalizing drivers involved in accidents in which they were not at fault. If passed, this legislation would eliminate the possibility of higher insurance premiums solely because the drivers were in accidents, even if they were blameless.
Ending unfair underwriting practices
Currently, many drivers face rate increases just for being involved in an accident—even if they did nothing wrong. S-3717 was drafted to put a stop to this practice. Under the proposed bill, insurers would be prohibited from using underwriting rules that raise rates based on a driver’s involvement in a motor vehicle accident if the insured was not at fault. This means that drivers who are unfairly impacted by accidents beyond their control would be protected from punitive rate adjustments.
Important exception to note
The bill does have an exception of sorts. The protection only applies to not-at-fault accidents that occur while drivers are covered by their current insurer. For example, an insurance company still may assign risk or consider a not-at-fault accident that happened before the driver became a policyholder.
What’s next?
The legislation, sponsored by Sen. Robert Singer, R-30, was introduced on Oct. 7, 2024. It has been referred to the Senate Commerce Committee for consideration.
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.
