New Jersey Legislature

New Jersey Insurance Commissioner Issues Bulletin on $1.5 Million Coverage Minimum

John C. Lane
Photo by Jonathan Schmer on Pexels.com

In January 2024 Governor Murphy signed into law a new requirement for auto liability insurance coverage, which takes effect for policies issued or renewed on or after July 1, 2024. The new law left open to question, for example, whether the new $1.5 Million minimum coverage would apply only to New Jersey-based motor vehicles, or possibly to any motor vehicle passing through or engaging in business in New Jersey.

The Commissioner’s Bulletin does not answer all the issues but does commit the regulators to certain understandings for motor carriers and their insurers. By the Act’s terms, the new minimum limits apply to owners and operators of commercial vehicles “registered or principally garaged” in New Jersey engaged in intrastate commerce. Vehicles having a gross vehicle weight rating of 26,001 or more pounds must be insured for not less than $1.5 Million. Those with a GVWR of 10,001 or more, but less than 26,001 pounds must have liability coverage of not less than $300,000.

The Bulletin parrots the statutory language that the required minimum insurance coverage may be provided as permitted by existing law, through a single fleet primary policy or a combination of primary and excess policies.

Insurers and producers (brokers and agents) are required to inform their insureds of the new required limits.

One issue not covered by the Act or the Bulletin is whether the New Jersey Deemer Statute will apply these minimums to out-of-state motor carriers operating in or through New Jersey, or by reforming an existing non-compliant out-of-state policy in the event of a covered casualty. We can expect this issue to spawn coverage litigation if the issue arises.

For many truckers in New Jersey, the new minimum insurance limits may not pose a significant problem. The New Jersey Motor Truck Association has advised us that a poll of their members reflects that the majority already have coverage meeting the new requirements. Our experience suggests that some New Jersey-based intermodal motor carriers may need to increase their coverages to meet the requirements.

Both the American Trucking Associations and the New Jersey Motor Truck Association originally opposed the new Act on various grounds, both practical and constitutional, but they did not carry the day with the Legislature or the Governor. Whether there will be litigation on those issues remains to be seen.

We shall report here any further developments under the new Act and possible action at the federal level, where the minimum liability insurance requirement for non-HAZMAT vehicles remains $750,000.

LEGISLATIVE UPDATE: Independent Contractor v. Employee

The Lane Law Letter

NJ: Proposed Legislation

NJ State House

It was all but certain to pass. New Jersey Governor Phil Murphy was waiting to sign it. Television ads proclaimed its virtues. But the State’s anti-independent contractor bill (similar to California’s AB5) was pulled from the last legislative session. Groups representing independent contractors in myriad occupations made forceful and practical arguments against the bill. Included were freelance writers, musicians, doctors, various independent teachers, truckers, graphic designers, bakers, and others. Many legitimate independent contractor businesspeople prefer the freedom of owning and operating their own businesses. They do not want to be artificially classified as employees, a move they say would harm their businesses. The legislation was re-introduced on January 14th, and referred to the Labor Committees of both the Senate and Assembly. We are watching developments in both New Jersey and New York, which is also considering similar legislation.

CA: Preliminary Injunction Granted

Much to the relief of many, on January 16th, Judge Benitez granted a preliminary injunction to the California Trucking Association, temporarily stopping the enforcement of AB5 upon motor carriers. In his decision, Judge Benitez writes, “…there is little question that the State of California has encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking. In so doing, California disregards Congress’ intent to deregulate interstate trucking, instead adopting a law that produces the patchwork of state regulations Congress sought to prevent. With AB-5, California runs off the road and into the preemption ditch of the FAAAA.”

Of Course Unreimbursed Medical Expenses are Recoverable…Aren’t They?

Peter C. Bobchin

Traditionally, New Jersey’s no-fault statute was interpreted to allow a plaintiff in a personal injury suit to recover unreimbursed medical expenses that exceeded his PIP coverage.  This was not an issue when all policies carried a required $250,000 in PIP coverage.  Over the years, however, the state legislature tweaked the PIP requirements, allowing insureds to purchase automobile liability policies with lower PIP limits to combat the rising cost of policy premiums.  Today, insureds can designate their health insurer as their primary PIP carrier, or purchase auto policies with PIP coverage as low as $15,000.  The courts, however, continued to view any medical expenses exceeding an insured’s PIP coverage recoverable, except where those expenses were paid by a private health insurer.            

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