New Jersey Directs Insurers to Provide Emergency Grace Period Amid COVID-19

The New Jersey Department of Banking and Insurance has directed insurers to provide financial relief to residents and businesses, as they continue to suffer financial hardship due to the COVID-19 pandemic.

The guidance issued to regulated entities follows Executive Order 123 signed last week by Governor Phil Murphy extending grace periods during which certain insurance companies, including health insurers, life insurers, and property and casualty insurers, will not be able to cancel policies for nonpayment of premiums.

The executive order requires a minimum 60-day grace period for health and dental insurance policies, and a minimum 90-day grace period for life insurance, insurance premium-financing arrangements, and property and casualty insurance, which includes auto, homeowners, and renters insurance.

Following the executive order, the department directed health and dental insurance carriers in the individual market, small group and large group markets to provide a grace period for premium payments of at least 60 days.

The department directed issuers of life insurance policies, property and casualty policies and insurance premium finance companies to provide a grace period for premium payments of at least 90 days. Consumers must contact their insurance company to take advantage of the emergency grace period and to discuss options to pay their premiums over time after the grace period ends.

The department is directing property and casualty carriers to:

The Department directed all carriers to, in addition to posting information on their websites, provide each policyholder with an easily readable written description of the terms of the extended grace period offered pursuant to the department’s guidance. The department will monitor events as they develop to determine if this emergency grace period must be extended.

Source: New Jersey Department of Banking and Insurance