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.