The New Jersey Senate Commerce Committee heard testimony that insurers say could make it more difficult for consumers to choose the level and type of insurance they use.
The Property Casualty Insurers Association of America urged the committee to oppose A-3038/S-1666 which prohibits the use of step-down provisions to limit uninsured and underinsured motorist (UM/UIM) coverage in certain circumstances.
“In our view, eliminating the step down provisions would remove the predictability we need to set accurate UM/UIM rates,” said Richard Stokes, regional manager and counsel for PCI. “It would shift the exposure to policies that often have higher limits, increasing the financial exposure presented any given situation. These decisions alone could cause significant changes on what insurers provide and at what costs. By increasing exposures, this legislation will increase costs for business to cover their auto insurance exposures.”
Stokes continued, “Consumers should have the freedom to use stepped-down provisions to contract for an appropriate type and level of insurance. We support the freedom of parties to determine what type of coverage and who should be covered when they purchase auto insurance. This legislation would essentially take away another right of business consumers to make their own decision about their business needs and requirements.”
He said this legislation would be a “step backwards by mandating coverage and taking important decisions away from consumers.”
Source: PCI
Topics Carriers Legislation New Jersey
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