Don’t Undermine NJ’s No-Fault Insurance System, NJBIA Says

TRENTON, New Jersey, July 26 -- The New Jersey Business and Industry Association issued the following news release:

NJBIA today urged Senators to reject a bill that could bring back skyrocketing auto insurance rates by undermining the state's no-fault insurance system. The Senate is scheduled today to vote on S-2432, which would permit recovery of certain medical expenses as uncompensated economic loss in automobile accident.

In a letter to Senators, NJBIA Chief Government Affairs Officer Chrissy Buteas said the association is concerned about cost.

"This bill will reverse this trend toward affordable auto insurance by creating a fault-based system of auto insurance in New Jersey," Buteas said. "This will increase litigation and medical costs for insurance companies, ultimately resulting in increased auto insurance costs for New Jersey residents."

"The state has been successful in preserving its no-fault insurance system, which provides New Jersey residents with available and affordable auto insurance coverage," Buteas said. "One of the main goals of the state's no-fault system is to address legal delays and costs by keeping minor claims of auto-related medical expenses out of the legal system. The creation of PIP arbitration, medical protocols, and fee schedules has done this well."

The legislation also is premature, Buteas said, as the New Jersey State Supreme Court is expected to rule on the issue in the coming months?. The court has recently granted a petition for certification, and oral arguments are expected in the fall.

"The Supreme Court of New Jersey has reviewed briefs on this issue detailing the history of no-fault legislation and the effect of the Appellate Division's decision on the state's PIP coverage scheme," Buteas said. "This is a complex issue that involves a complicated statutory and regulatory scheme, and we ask that the Senate hold S-2432 until a decision is delivered by the Supreme Court."