Article written by Steven J. Bodnar, Esq
You are entitled to relief of your insurance premiums
Individuals and businesses will pay less for insurance as a result of the COVID-19 pandemic. For each month of the declared public health emergency, the following lines of insurance must make a premium refund or adjustment to New Jersey policyholders:
- Private passenger automobile insurance;
- Commercial automobile insurance;
- Commercial multiple-peril insurance;
- Commercial liability insurance;
- Medical malpractice insurance; and
- Any other line of coverage where the measures of risk have been substantially overstated as a result of the COVOD-19 pandemic.
The declared emergency has limited auto travel and made businesses adapt to new practices and procedures while operating. Fewer cars on the roads and highways has deceased the risk of accidents, injuries and fatalities, and the risk that auto insurance premiums are based upon. Modified business operations has resulted in insurance premiums that overcharge for the risks they are designed to insure.
The New Jersey Department of Banking and Insurance has ordered insurers to provide policyholders premium relief as quickly as practicable, but no later than June 15, 2020. Policyholders may receive premium refunds in the form of a premium credit, reduction, return of premium, dividend, or other appropriate premium adjustment, based on:
- Reclassification of exposure to comport with current exposure, or
- Reduction of the exposure base (e.g., miles driven) to reflect actual or anticipated exposure.
Some insurers have already made premium adjustments. On March 9, 2020, Governor Murphy issued Executive Order 123 directing that all companies provide a 90-day grace period to clients of insurance premium finance companies due to the disruption caused by COVID-19. For information relating to how the grace period and reduced premiums will affect your car, home or other insurance, contact your insurance company.
If you have questions about this issue or any other regarding the public health emergency and your rights, feel free to contact Rosenberg | Perry & Associates. We are here to help.