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NJ lawmakers pull back from costly auto insurance plan, but 1 million may still pay more

New Jersey lawmakers appear to have struck a deal on a wall-down auto insurance reform bill after a more costly proposal for New Jersey drivers stalled.

However, more than 1 million people in the state would still pay more each year if the latest bill is signed into law.

A state Assembly committee on Thursday approved legislation that would hike the minimum amount of liability insurance in the Garden State from its current $15,000 coverage to $25,000 beginning in 2023, and a minimum of $35,000 starting in 2026.

If passed by both the state Senate and Assembly and signed into law by Gov. Phil Murphy, 1.1 million New Jersey drivers — or about 20% currently on the road — could expect to pay an additional $120-$130 a year in coverage, both advocates and opponents of the bill said.

The bill’s main sponsor in the lower chamber, Assembly Majority Leader Lou Greenwald, D-Camden, didn’t respond to multiple calls for comment. But a Republican sponsor of a similar measure, state Sen. Jon Bramnick, and a legislative source with knowledge of negotiations agreed this bill is the most likely to hit the governor’s desk in place of a broader package that opponents warned would force 1.27 million drivers to pay as much as $350 more a year.

“I’m not optimistic,” Bramnick, R-Union, said about his bills passing.

The original package that cleared a state Senate committee Monday would have required drivers in the Garden State to select plans with a minimum of $250,000 in personal injury protection, commonly called PIP. Another bill would prohibit motorists from using private health insurance coverage as the primary payer for personal injury protection coverage in exchange for an auto insurance discount.

Bramnick, who argues the reforms are long overdue to help victims of crashes, supported those measures along with the state’s top lawmaker, state Senate President Nicholas Scutari, D-Union.

“All I want to see is some effort to help the policyholders — that’s it. And I haven’t seen it in decades,” Bramnick said. “I’m proud of what I’m doing and I’ll take the heat. The insurance companies are not the Red Cross.”

He referred to the Assembly bill as “a fair compromise” and one he would support in the Senate.

Insurers and other advocacy groups warned the larger proposal would result in fewer insured drivers on New Jersey roads because they wouldn’t be able to afford it.

Gary LaSpisa, vice president of the Insurance Council of New Jersey, supported raising minimum coverage to $25,000. But his group opposed the bill on Thursday because of the additional increase slated for three years later.

“I still think we will see a spike in the uninsured motorist because some people simply won’t be able to bear even the $130 we’re talking about,” LaSpisa said. “We can’t say that just because we’ve reduced the impact that we’ve eliminated the impact, and I think we should be clear about that.”

He said the earlier version would have been “calamitous” for drivers.

Bramnick, an attorney, says he regularly sees clients who are badly injured in car accidents and are shocked to find they’re only entitled to $15,000 — even less if the deductible is taken into account — and many times that doesn’t come close to covering the full cost of the injuries.

The average settlement is $18,000, LaSpisa said.

“We had reached out to the Senate president when this bill was introduced to discuss moving to $25,000 … to keep up with the increased average settlement,” he said.

Scutari didn’t return a call for comment.

The bill approved the Democratic-controlled Assembly committee with a 7-5 vote along party lines.

“The timing is poor,” Assemblyman Robert Auth, R-Bergen, said. “We’ve had countless people come up here and explain what the difficulties are to various stakeholders in the state and we’re not listening. We know better than the public, we know better than the people who give testimony, and we got to make sure certain industries are taken care of. I think that’s reprehensible.”

Even some Democrats expressed skepticism about whether they planned to vote in favor of it when it reaches the full Assembly as the price has rocketed and inflation is at a decades high.

“My sole concern is the timing,” said Assemblyman John McKeon, the chairman of the committee.

He recalled his time as mayor of West Orange when the city increased the fee to the local pool by $10.

“I never forget being as embarrassed (when he said) ‘Come on everyone, it’s only 10 bucks,” McKeon, D-Essex, said. “Everybody looked at me and said, ‘You don’t get it,’ and I’ve always remembered that.”

He added: “The fact of the matter is, with probably little exception, the 1 million insured, the 20% that have minimum coverage, are the ones that can least afford it. And this is another $120 out of their pockets. And that’s why I have significant concerns.”

Assemblyman Joe Danielsen was more vocal in his opposition.

“I wish I understood why we’re doing this now,” Danielsen, D-Somerset, said. “As of today, I have no intention of voting for it on the floor.”

Ferlanda Fox Nixon, chief of policy and government affairs for the African American Chamber of Commerce of New Jersey, asked lawmakers not to diminish what an extra $10 a month means to some New Jerseyans.

“For certain people, ‘only $10 a month’ is a lot of money,” she said. “We’re talking about a group of people who have very limited disposable income … (and) a group of people who typically don’t work from home.”

The bill that passed the Assembly committee only dealt with liability insurance — not PIP. It also didn’t include other measures that advanced in the Senate that would have loosened the lawsuit rules for accident victims injured by drunken drivers. In these cases it would have eliminated the verbal threshold, which spells out which injuries are eligible for lawsuits.

Opponents argued that they showed at least part of the intent of the reforms is to benefit personal injury attorneys.

They said if the original bill package became law, it could force drivers to pay as much $350 more each year.

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Matt Arc may be reached at marco@njadvancemedia.com. Follow him on Twitter at @MatthewArco.

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