New Jersey’s New Insurance Requirement for Commercial Vehicles
A recent amendment to New Jersey law mandates that large commercial vehicles must have an increased insurance coverage of $1.5 million. This change follows years of advocacy from some state legislators, culminating in the bill’s approval last month and signature by Governor Phil Murphy.
The supporters of the legislation did not respond to FreightWaves’ inquiries regarding its specific provisions. Various insurance-related websites have conflicting reports about previous requirements under New Jersey law, with certain hazardous material transportation vehicles purportedly needing $5 million in coverage. However, the general consensus indicates that the former requirements were considerably lower than the new $1.5 million threshold.
The new insurance requirement will take effect for vehicles exceeding 26,000 pounds six months after the law’s “enactment date.” A spokesperson for the Democratic majority in the New Jersey Senate stated that Governor Murphy signed the bill on January 16.
Law firm Scopelitis pointed out in a recent communication that the legislation does not explicitly limit its application to commercial vehicles operating solely within New Jersey. It seems to suggest that the higher minimum coverage requirements apply to all vehicles within its jurisdiction, regardless of whether they are used for interstate or intrastate operations.
Greg Feary, a partner at Scopelitis, expressed concerns about the law’s enforceability. He noted that the terminology within the legislation might imply it only pertains to trucking companies registered in New Jersey. He also mentioned the complexities introduced by the International Registration Plan (IRP), which allows multi-state vehicle registrations and could complicate enforcement by New Jersey authorities.
Kevin Abramson, president of Cover Whale, remarked that the New Jersey law represents a notable shift in the insurance landscape for commercial vehicles, indicating potential changes in pricing and risk assessments. Meanwhile, Joe Schreiner from Reliance Partners predicted that the increased insurance costs might prompt some trucking companies to relocate operations to neighboring states to avoid the higher premiums.
Furthermore, J.J. Burns, an attorney with Dollar, Burns, Becker & Hershewe, explained that most commercial auto policies include clauses addressing liability mandates from other states, which will likely influence insurance costs. With the New Jersey requirement now set at $1.5 million, there are also concerns about trucks possibly avoiding the state altogether to sidestep the new insurance burden.
