More than 1 million New Jersey drivers will most likely pay more for car insurance after Gov. Phil Murphy signed a contentious bill into law on Friday.
The legislation will raise the minimum amount of liability insurance in the Garden State from $15,000 to $25,000 beginning in 2023, and to $35,000 beginning in 2026. According to industry officials, approximately 1.1 million drivers will pay an additional $125 per year.
Proponents of the bill argue that because of the low coverage option, victims of car accidents aren’t always able to have their medical bills paid in full. Furthermore, they claim insurers have agreed that the price increase will not take effect until at least 2026.
It passed the state Senate last month with a 25-13 vote without debate and the Assembly with a 44-29 vote after a minor stumbling block when two Republican lawmakers spoke out against it. They were overwhelmingly approved by both Democratic-controlled chambers.
Assemblyman Robert Auth, R-Bergen, said at the time, “This is a really, really bad bill.” “For crying out loud, let’s give New Jersey’s poor, middle-class, and working-class families a break.” “Give them a break.”
Murphy signed a scaled-back reform bill that state Senate President Nicholas Scutari, D-Union, had hoped to pass.
Scutari sponsored more than a half-dozen bills, which opponents claimed would cost 1.27 million drivers up to $350 more per year.
His original proposals would have required drivers to choose plans with at least $250,000 in personal injury protection, or PIP. Another bill would make it illegal for drivers to use private health insurance as the primary payer for personal injury protection coverage in exchange for a car insurance discount.
The Insurance Council of New Jersey, which represents insurers, agreed to raise the minimum coverage to $25,000 but opposed the bill because of the automatic increase in 2026. According to the group, the average cost of an injury claim is $18,000.