The Professional Insurance Agents of New Jersey Inc. has issued a comment on regulations proposed by the State’s Department of Banking and Insurance, supporting the department’s goal of making it easier for auto policyholders to maintain coverage with their current insurer.
“We appreciate the opportunity to comment on the department’s proposal regarding timely receipt of renewal premiums. Many of the proposed changes will make maintaining auto coverage easier for New Jersey drivers.” stated John D’Agostino Jr., CIC, PIANJ president. “For example, changing the premium due date on a person’s renewal bill to indicate 11:59 p.m. of the date it is due will be more clear.”
Though the PIANJ generally approved of the department’s goals, it also offered several suggestions, including adopting a “mailbox rule.” Under this rule, customers can reply by mail to renewal offers made by mail and the insurer is deemed to have received the renewal payment when the customer places his or her payment in the mail.
“The department has a similar rule with respect to health claims payments,” D’Agostino noted. “It is logical to use the same rule for auto premium payments.”
PIANJ also suggested that insurance companies should be required to send both the insureds and their agents notice when coverage is not renewed due to a late payment. “Many insureds assume that because their payment check has been cashed, they have renewal coverage. This is not always the case,” D’Agostino indicated. “Requiring insurance companies to provide notice to the insured and producer that the renewal did not take effect will help keep unwittingly uninsured motorists off the road.”
The proposal would also allow insurers to charge a late fee of up to $25 when renewal premiums are received after the due date, but are still deemed timely under the proposal. The PIANJ said companies should be allowed to charge late fees on installment payments, as well as renewal premiums that are not timely, but are still accepted by the company.
“We believe allowing fair business practice on both the consumer and company side will ultimately benefit the insurance-buying public,” D’Agostino concluded.
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