New Jersey passes bill to increase minimum insurance to $1.5M
Following numerous unsuccessful efforts at the federal level, the New Jersey legislature passed into law a bill to increase the minimum liability insurance requirement for motor carriers.
In January, New Jersey lawmakers passed a law to increase motor carriers’ minimum insurance requirement to $1.5 million for each truck weighing 26,001 pounds or more. The legislation, which was introduced by Sen. Nicholas Scutari, D-Middlesex, passed the Senate, State Assembly and the Senate again all on Jan. 8. Gov. Phil Murphy signed the bill into law on Jan. 16.
New Jersey’s minimum, which motor carriers will be required to meet when they renew policies beginning on July 16, is twice as much as the current federal minimum of $750,000.
The Owner-Operator Independent Drivers Association, which represents small-business truckers, said the New Jersey legislature “ramrodded” the bill into passage and called the increase “unnecessary.”
The Association emailed its New Jersey members on Wednesday, Feb. 7 and encouraged them to reach out to their lawmakers.
“OOIDA is vigorously investigating the legality of this expensive and unnecessary new requirement,” the Association wrote. “We will keep you advised as we learn more.”
House bill
While a significant increase to minimum insurance has passed in New Jersey, a member of Congress is trying to force an even bigger hike at the federal level.
In December, Rep. Jesus “Chuy” Garcia, D-Ill., introduced the Fair Compensation for Truck Crash Victims Act, which would increase a trucking company’s minimum liability insurance from $750,000 to $5 million – a 566% surge.
OOIDA reached out to its members in January, asking them to oppose HR6884.
“There is absolutely no data to demonstrate that raising minimums would improve safety in any way,” OOIDA wrote. “And research shows that existing minimums cover costs in over 99% of cases.”
The Association said the bill is motivated by trial lawyers, pointing out that motor carriers already carry $1 million in insurance. In addition, the most recent study into the issue found that the current minimum insurance level covered damages in 99.4% of cases.
OOIDA has helped fight off previous attempts at the federal level to increase the minimum insurance requirement.
Under the previous name of the Insurance Act, Garcia attempted to increase the minimum amount to $4.9 million in 2019 and to $5 million in 2021. Neither of the standalone bills came close to passing the House, as they garnered only six and eight co-sponsors, respectively. Rep. Matt Cartwright, D-Pa., also tried to increase the minimum number several times, starting with a hike to $4.2 million in 2013. LL