David Madara, President of The Professional Insurance Agents of New Jersey Inc.and the organization’s Legislative Representative Leon Zimmerman, attended a press conference on Friday with Governor James E. McGreevey, who announced a new plan to strengthen his reform proposals for New Jersey’s auto insurance market.
The Governor said his auto insurance reform plan will stop the practices that force good drivers to subsidize bad drivers, noting that New Jersey’s current system works very quickly for bad drivers, who get insurance through The New Jersey Personal Automobile Insurance Plan (PAIP), but good drivers are faced with a slow and cumbersome application process.
The proposed bill, S.63/A.2625, is scheduled to be heard by the full Assembly later this month. It would prohibit insurance companies from dropping coverage for drivers whose payments are received late even though they were mailed on time.
“This reform bill gives agents the ability to offer more options to consumers,” Madara told reporters from New Jersey Network and the Star Ledger. “By improving the regulatory environment, new companies will enter New Jersey and that open competition will eventually stabilize rates.”
“Many drivers who mail their payments on time are losing coverage because renewal payments are received a day or two late or because they did not complete renewal questionnaires,” McGreevey indicated. “These unnecessary lapses and cancellations fuel the market crisis because they (companies and producers) must re-underwrite and issue new policies for the drivers from other companies who are now in the market.”
The Governor said the bill also will impose zero tolerance for fraud, create a tough new penalty for crimes of insurance fraud and establish new consumer protections such as a Bill of Rights for consumers and a requirement that companies give consumers three different premium scenarios.
Banking and Insurance Commissioner Holly C. Bakke, Deputy Commissioner Rolando Torres, Assemblywoman Linda R. Greenstein, Assemblywoman Bonnie Watson-Coleman and Assemblyman Gary L. Guear also attended the press conference.
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