New Jersey Senate Bill S2254

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Repeals no-fault automobile insurance law and requires mandatory liability insurance law for motor vehicles.

Impact

With the implementation of S2254, drivers will now be required to maintain a minimum liability insurance coverage of $100,000 for injuries to one person and $200,000 for injuries to multiple persons, significantly raising the previous limits. By making uninsured and underinsured motorist coverage compulsory, the bill aims to ensure that drivers are protected under various circumstances, thus promoting greater accountability among motorists. The provision that requires disputes regarding uninsured and underinsured claims to be resolved through binding arbitration may streamline claims processes, though it could raise concerns regarding access to legal recourse for policyholders.

Summary

Senate Bill S2254 proposes significant changes to automobile insurance regulations in New Jersey by repealing the existing no-fault insurance system, which allows for victims of car accidents to collect benefits without proving fault. Instead, the bill mandates liability insurance for all motor vehicle owners, establishing minimum coverage amounts for bodily injury and property damage, thereby shifting the responsibility onto the at-fault driver. This shift aims to enhance the financial protection afforded to victims of automobile accidents while reducing the overall costs associated with no-fault systems.

Contention

The transition from a no-fault to a liability-based system has generated debate among stakeholders. Supporters argue that this change will bring about enhanced protection for victims and foster accountability among drivers. Conversely, critics contend that the repeal of the no-fault system could lead to increased litigation and protracted claims processes, ultimately raising costs for consumers. Additionally, the proposal includes the elimination of certain consumer protections, such as the take-all-comers law, which has historically guaranteed insurance access to all applicants deemed responsible drivers.