NJ Insurance Rates Could Skyrocket Under New Law: Report

NEW JERSEY - Gov. Phil Murphy signed a bill into law Friday that will likely drive up insurance for over 1 million New Jerseyans, according to a NJ.com report.

The legislation will raise the minimum liability insurance amount from $15,000 to $25,000 starting in 2023, the publication reported, adding that the minimum will go up yet again in 2026 to $35,000.

While champions of the bill claim that the legislation establishes important safeguards, critics warn that the protective hikes will only make insurance more unaffordable for New Jersey residents, particularly during periods of inflation. The Insurance Council of New Jersey, agreed with the minimum coverage raise to $25,000 but ultimately opposed the bill because of the automatic increase in 2026, NJ.com reported.

The signed legislation serves as a diluted version of a bill package introduced by state Senate President Nicholas Scutari, D-Union, which were approved by the state Senate Commerce Committee in June.

The original measures called for raising the minimum amount of liability coverage for commercial motor vehicles to $1,500,000 to "ensure that businesses are protecting their employees from liability as well as protecting motorists,” as well as S467, which would provide that limitations on lawsuits won't apply in accidents caused by drunk or reckless drivers, and S481, which would require automobile insurance policies to provide minimum amounts of coverage for liability, uninsured motorists and underinsured motorists.

"We need stronger consumer safeguards so policy holders aren't denied the rights and compensation they deserve," said Sen. Scutari in June. "Accident victims are now under-protected and the taxpayers are left to foot the bill. These reforms will help consumers and taxpayers."