Legislation recently signed into law by Gov. Phill Murphy will greatly expand the rights of insurance consumers in New Jersey by providing them with the right to sue when they’ve been treated unfairly by their auto insurance carriers.
The bill, known as the New Jersey Insurance Fair Conduct Act, creates a cause of action for consumers to bring first-party claims against insurers that act in bad faith by denying, delaying, or underpaying legitimate claims involving uninsured and underinsured motorists.
The new law, which has been supported by New Jersey Association of Justice (NJAJ) for many years, provides a meaningful remedy for consumers to hold insurance companies accountable for acting in bad faith and applies only to UM / UIM claims. It allows claimants to sue an auto insurer and “related parties” over:
- Unreasonable delay or unreasonable claim denial.
- Any violation of the NJ Unfair Claims Settlement Practice Act.
The Insurance Fair Conduct Act is a major victory for consumers, as a private right of action did not previously exist. Instead, insurers that violated the NJ Unfair Claims Settlement Practice Act could only be held accountable if the state elected to take administrative action in cases where violations constituted a “general business practice.” As Levinson Axelrod, P.A. Partner Michael B. Fusco notes:
“To date, Courts have been hesitant to impose penalties on carriers that act in bad faith. It’s refreshing to see that the legislature and Gov. Murphy have come to the protection of consumers, who through no fault of their own, have wound up in these circumstances.
All we’re asking is that the carriers act in “good faith” – this law now simply imposes potential penalties if they do not. Since the insurance companies lobbied vigorously against the new law, it’s almost an admission that they have been acting in “bad faith” on certain claims up until this time.”
Read more on this press release.
Levinson Axelrod, P.A. has seen considerable changes to New Jersey law and insurance practices since the founding of our firm in 1939. While laws have evolved, the dynamic between insurance consumers and insurance companies has remained one in which powerful corporations do whatever they can to gain and keep the upper hand over consumers.
As a firm that fights for victims of motor vehicle accidents in personal injury, wrongful death, and UM / UIM claims, our team at Levinson Axelrod, P.A. is dedicated to helping victims fight back against insurers that only want to protect their bottom line. We’re available to help residents across New Jersey protect their rights following preventable auto accidents and can discuss your options for pursuing compensation and / or bad faith actions during a free consultation. To speak with a lawyer, call (732) 440-3089 or contact us online.