A new law authorized by the New Jersey General Assembly and Senate on Monday gives motorists injured in car accidents the authority to file civil lawsuits against auto insurers.
Under the brand new Jersey Insurance Fair Conduct Act, policyholders can now sue if they are unreasonably denied a claim for uninsured or underinsured coverage or maybe insurers violate state laws that prohibit unfair or deceptive acts or practices. Suits may also be filed if you find unreasonable delay for coverage or payment of benefits without needing to prove the insurer’s actions like a usual business practice. The state previously required multiple violations before enforcement happened and it was as much as their state Commissioner of Banking and Insurance to pursue legal action.
The Assembly passed the balance 45-22-4 and also the Senate passed it 23-13. It took effect immediately and supplements Title 17 from the Revised Statutes.
Plaintiffs have entitlement to trial verdicts not to exceed 3 times the applicable coverage amount, pre- and post-judgment interest, reasonable attorney's fees, and reasonable litigation expenses.
For repairers, that means regulations already in place might be initially accompanied by insurers to prevent litigation and as a result, accelerate estimates and price negotiations. For example, insurers might be more conscious of what the law states already in position that needs inspection of car damages prior to repair within seven working days.
“If insurance providers knew they could get fined and have to pay court costs and attorney fees and things like that they would stick to the law,” Alliance of Automotive Service Providers/New Jersey Executive Director Charles Bryant told RDN in December.
AASP/NJ Executive Board Collision Chairman Dennis Cataldo thinks the law needs to go further and insurance companies shouldn't have to be taken to court for regulations to become enforced by the state's Department of Banking and Insurance.
Despite claims the act would raise premiums, the balance says rate increases won’t be forwarded to consumers as a result of compliance towards the law by insurers. The commissioner may determine whether an insurer's rates are constitutionally adequate pursuant to law, according to the act.
“When the commissioner determines that rate relief is essential, the commissioner shall determine an appropriate rate adjustment,” the act states.