A new bill that takes aim at injury coverage minimums in car insurance passed a significant state Senate committee hurdle late last month. Sponsored in a bipartisan effort by Senate President Nicholas Scutari and Senator Jon Bramnick, the lawmakers hope the new rules will extend protections to those injured in an accident.
The proposed plan takes on New Jersey’s current personal injury protection (PIP) minimum of $15,000 and increases it to $250,000. These new rules will help those injured in a car accident receive increased benefits, but they may increase insurance premiums by as much as 90%. As the bill moves to the full Senate and Assembly, lawmakers consider the financial ramifications.
The Problem With New Jersey PIP Minimums
Currently, New Jersey law requires that drivers only carry $15,000 in minimum PIP. Proponents of the bill argue that the current minimum does little for injury victims, especially amidst rising healthcare costs. Senator Bramnick says these bills are necessary because insurance companies “… have been taking [benefits] away for 25 years.”
The package of bills will also prevent insurance carriers from offering drivers reduced rates on auto insurance if they use their private health insurance for injury protection. Though the package is currently hotly debated, lawmakers on both sides recognize that a minimum of $15,000 of PIP is too low to address many car accident injuries.
Arguments Against Increasing Minimums
Opponents of the bill argue that the increase in premiums will be economically devastating for most insured drivers. A 90% increase in rates, combined with escalating inflation, would take money out of the pockets of over 1 million New Jersey drivers. A New Jersey Citizen Action representative claims that these increases would also disproportionately impact low-income residents and communities of color. Without addressing these concerns, and the discriminatory rating practices used by many insurance companies, opponents of the bill do not believe the benefits will outweigh the costs.
The bill packages also seek to increase the minimum liability for commercial vehicles to $1.5 million, which will heavily impact local businesses with transportation fleets.
Lawmakers Agree That Reform Is Essential
Currently, New Jersey’s PIP minimums are the lowest in the country and have not increased for 50 years. Lawmakers on both sides agree that reform is necessary and that increasing these minimums will be essential to protecting New Jersey drivers in the future.