On behalf of the New Jersey Business & Industry Association, I am writing to strongly objectto Senate Bill No. 1559 and Assembly Bill No. 1659, the so called “bad faith” insurance legislation now scheduled for a vote in the AssemblyonMonday,Jan 10.We ask that you vote“no”on these bills.
New Jersey has made tremendous strides in the last 20 years when it comes to controlling the cost of automobile insurance. In 2004, Gov. McGreevey and the Legislature took bold actions to reform our system, taking it from a national mockery to a national model. They solved an automobile insurance crisis that hurt every New Jerseyan, especially those with limited resources and those living in our urban areas.
This legislation, if enacted, will take a step back to the bad old days when insurers were fleeing the market and costs were skyrocketing. It will drive up the cost of auto insurance premiums and take us back to the path of New Jersey once again leading the nation in the highest auto insurance rates.
While portrayed as ensuring that auto insurance companies act in good faith when settling uninsured and underinsured policy claims, this bill has nothing to do with such concerns -there already exists multiple paths to address these issues-and everything to do with enriching plaintiffs’ attorneys by tipping the balance of negotiating power into their hands. If this bill were to pass, an insurance company that does not give a plaintiff everything they demand can face significant liabilities. Costs to insurance companies will rise and the bottom line is that the cost of insurance that consumers and our business members pay, will go up. These are facts.
New Jersey already has some of the highest property taxes, the highest corporate business tax, one of the highest outmigration rates, and a burdensome regulatory environment. Our citizens want New Jersey to be more affordable, not less. We solved the auto insurance crisis 20 years ago. Let’s not make the same mistakes again. Let’s learn from our history. We urge you to vote “no” on these bills. Let’s keep auto insurance affordable.