Car insurance rates for New Jersey drivers could rise over the next few years under a new law signed by Gov. Phil Murphy.
The bill, which Murphy signed Friday, takes effect immediately and will raise the minimum requirement for automotive liability insurance. Murphy signed it without making any statement, and his office did not respond to a message seeking comment.
Here is what to know:
What changes will happen
State law requires all drivers to have car insurance. The type and coverage for accidents varies, but a standard policy covers $15,000 for bodily injury per person, $5,000 for property damage and $30,000 for uninsured motorists.
The new law requires the standard car insurance policy to increase in January and then again in 2026. These changes would more than double the minimum requirement for a standard policy from $15,000 now to $35,000 in 2026.
A minimum policy will require vehicle owners to maintain coverage of $25,000 for a crash that results in the injury or death of one person; $50,000 for a crash resulting in multiple injuries or death; and $25,000 for a crash with no injuries. All liability policies also include payment for all or part of what a driver is legally entitled to recover as damages from drivers of uninsured and underinsured vehicles.
Ethics questions raised
The bill was sponsored by two state senators who also serve as personal injury attorneys. Senate President Nicholas Scutari, D-Union, and Sen. Jon Bramnick, R-Union, claim the change would ultimately benefit motorists. Bramnick said the legislation is happening now because “you have somebody leading the Senate now who actually represents individuals and not insurance companies.”
Both dismissed questions of whether their proposed legislation violates the state's policy on conflicts of interest. The Office of Legislative Services, which includes an ethics counsel to advise members of the Legislature, declined to comment.
“I’ve never asked" for a legal opinion "because I know it’s an unfair question, and I think if you raised it you’re saying things that are 100% untrue,” Bramnick said.
Scutari said raising ethics questions was "ridiculous" and suggested that since he's been in the Legislature for two decades he knows the rules and would not violate them.
Scutari maintains that the legislation would not lead to increases in the individual premiums of drivers throughout the state because insurance companies would have to go before the Department of Banking and Insurance to request it, and it wouldn't get approved.
"They have to provide that additional $10,000 in coverage to motorists, and they cannot raise the rates," he said last month. "They have no justification for it."
The legislation includes a phased increase in required minimums, the first in 2023 and the second in 2026. While there is nothing in the bill to require it, Scutari maintains that after the first increase, the Legislature will "look at" the impact of the increase before the second phase takes effect. In that case, he said, there may be an increase.
This article originally appeared on NorthJersey.com: NJ car insurance rates may rise after Murphy signs controversial law