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New Jersey Mandates Higher Insurance for Heavy Trucks
The New Jersey Legislature has enacted a law that requires heavy trucks to have a minimum liability insurance coverage of $1.5 million, which is double the current federal minimum set at $750,000.
Requirements for Commercial Motor Vehicles
According to the new legislation, owners or registered operators of commercial motor vehicles that weigh over 26,000 pounds must hold a minimum insurance coverage of $1.5 million to protect against losses from legal liabilities related to bodily injury, death, or property damage.
Legislative Background and Support
This law, which takes effect on July 1, had faced delays in the Legislature for more than a year before receiving approval from Democratic Governor Phil Murphy on January 16. The bill was primarily sponsored by Nicholas Scutari, the Senate president and an attorney.
Federal Minimum Insurance Regulations
The existing federal standard established by the Federal Motor Carrier Safety Administration mandates a minimum of $750,000 in liability insurance and has been in place since 1985. Although discussions about increasing this threshold occurred, a 2022 report indicated that there wasn’t enough evidence to support such a change.
Industry Reactions and Concerns
This legislation has drawn criticism from several trade organizations including the American Trucking Associations and the New Jersey Motor Truck Association. The law’s implications in terms of jurisdiction—whether it pertains solely to New Jersey-based carriers or also affects interstate carriers—remain unclear.
Impact on Insurance Costs
Jennifer Blazovic, interim executive director of the New Jersey Trucking Association, noted that while many members may already exceed the $1.5 million coverage, the exact effects of the new law on the industry are still being evaluated. With expected increases in insurance premiums ranging from $20,000 to $40,000 annually, the law could particularly burden smaller motor carriers.
Future Legal Implications
Experts suggest that if the law is applied to out-of-state carriers, it could lead to legal challenges against its enforcement due to possible conflicts with federal regulations. The Truck Rental and Leasing Association has expressed concerns that any increase in the minimum insurance level will significantly raise premiums for trucking companies across the board.
