A new bill, “New Jersey Insurance Fair Conduct Act,” has been enacted this month by New Jersey Governor Phil Murphy, which will help to correct unfair and unreasonable practices by insurance companies. Specifically, this law will apply to underinsured and uninsured motorists also referred to as UM/UIM policies. Policies that include this type of coverage are useful when a person is involved in an accident with another party who is at fault, but the person at fault does not have enough insurance to cover the cost of injuries. Read more about understanding insurance policies, here.
This new law will force insurance companies to conduct business in a responsible manner. The law will allow a claimant to file suit against his or her automobile insurer for
- An unreasonable delay or unreasonable denial of a claim for payment; or
- Any violation of the provisions of section 4 of P.L. 1947, c. 379 (c. 17:29B-4)
[the New Jersey Unfair Claims Settlement Practices Act].
What is unique about this law, is that the claimant needs to only prove that the insurance company violated the rules. If successful, the claimant may be entitled to reasonable attorney’s fees and litigation expenses. Even if a claimant doesn’t have to pursue a claim against their insurance company for violating these rules, the new law may hasten the way insurance companies respond to lawsuits in general.
What does this mean for drivers?
Since this law only applies to those pursuing benefits from UM/UIM coverage, drivers might consider making sure that their UM/UIM insurance coverage limits are enough to protect themselves and their family in the event they are injured by an uninsured or underinsured driver.
It is also important for drivers to hire experienced, personal injury lawyers that can spot when insurance companies violate these rules. If you have been injured in a motor vehicle accident, contact our Cherry Hill Car Accident attorneys today for a free consultation.