Requires liability insurance coverage for special automobile insurance policies.

S3367

SENATE, No. 3367

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 5, 2026

Sponsored by:

Senator� CARMEN F. AMATO, JR.

District 9 (Ocean)

SYNOPSIS

���� Requires liability insurance coverage for special
automobile insurance policies.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning special automobile insurance policies
and amending P.L.1968, c.385 and P.L.2003, c.89.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 2 of P.L.1968,
c.385 (C.17:28-1.1) is amended to read as follows:

���� 2���� a. Except for a basic
automobile insurance policy, no motor vehicle liability policy or renewal of
such policy of insurance, including a standard liability policy for an
automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), insuring
against loss resulting from liability imposed by law for bodily injury or
death, sustained by any person arising out of the ownership, maintenance or use
of a motor vehicle, shall be issued in this State with respect to any motor
vehicle registered or principally garaged in this State unless it includes
coverage in limits for bodily injury or death as follows:

���� (1) an amount or limit of
$15,000 for plans issued or renewed prior to January 1, 2023, $25,000 for plans
issued or renewed on or after January 1, 2023 but prior to January 1, 2026, and
$35,000 for plans issued or renewed on or after January 1, 2026, exclusive of
interest and costs, on account of injury to, or death of, one person, in any
one accident, and

���� (2) an amount or limit,
subject to such limit for any one person so injured or killed, of� $30,000 for
plans issued or renewed prior to January 1, 2023, $50,000 for plans issued or
renewed on or after January 1, 2023 but prior to January 1, 2026, and $70,000
for plans issued or renewed on or after January 1, 2026, exclusive of interest
and costs, on account of injury to or death of more than one person, in any one
accident, under provisions approved by the Commissioner of Banking and
Insurance, for payment of all or part of the sums which the insured or his
legal representative shall be legally entitled to recover as damages from the
operator or owner of an uninsured motor vehicle, underinsured motor vehicle, or
hit and run motor vehicle, as defined in section 18 of P.L.1952, c.174
(C.39:6-78), because of bodily injury, sickness or disease, including death
resulting therefrom, sustained by the insured, caused by accident and arising
out of the ownership, maintenance, operation or use of such uninsured, underinsured
or hit and run motor vehicle anywhere within the United States or Canada;
except that uninsured motorist coverage shall provide that in order to recover
for non-economic loss, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2),
for accidents to which the benefits of section 4 (C.39:6A-4) of that act apply,
the tort option elected pursuant to section 8 (C.39:6A-8) of that act shall
apply to that injured person.

���� All motor vehicle liability
policies, except basic automobile insurance policies, shall also include
coverage for the payment of all or part of the sums which persons insured
thereunder shall be legally entitled to recover as damages from owners or operators
of uninsured and underinsured motor vehicles, other than hit and run motor
vehicles, because of injury to or destruction to the personal property of such
insured, with a limit in the aggregate for all insurers involved in any one
accident of $25,000 for plans issued or renewed on or after January 1, 2023,
and subject, for each insured, to an exclusion of the first $500.00 of such
damages.

���� b.��� Uninsured and
underinsured motorist coverage shall be provided, as an option by an insurer to
the named insured electing a standard automobile insurance policy, up to at
least the following limits: $250,000.00 each person and $500,000.00 each
accident for bodily injury; $100,000.00 each accident for property damage or
$500,000.00 single limit, subject to an exclusion of the first $500.00 of such
damage to property for each accident, except that the limits for uninsured and
underinsured motorist coverage shall not exceed the insured's motor vehicle
liability policy limits for bodily injury and property damage, respectively.

���� Rates for uninsured and
underinsured motorist coverage for the same limits shall, for each filer, be
uniform on a Statewide basis without regard to classification or territory.

���� c.���� Uninsured and
underinsured motorist coverage provided for in this section shall not be
increased by stacking the limits of coverage of multiple motor vehicles covered
under the same policy of insurance nor shall these coverages be increased by
stacking the limits of coverage of multiple policies available to the insured.�
If the insured had uninsured motorist coverage available under more than one
policy, any recovery shall not exceed the higher of the applicable limits of
the respective coverages and the recovery shall be prorated between the
applicable coverages as the limits of each coverage bear to the total of the
limits.

���� d.��� Uninsured and
underinsured motorist coverage shall be subject to the policy terms, conditions
and exclusions approved by the Commissioner of Banking and Insurance,
including, but not limited to, unauthorized settlements, non-duplication of
coverage, subrogation and arbitration.

���� e.���� For the purpose of this
section, (1) "underinsured motorist coverage" means insurance for
damages because of bodily injury and property damage resulting from an accident
arising out of the ownership, maintenance, operation or use of an underinsured
motor vehicle.� Underinsured motorist coverage shall not apply to an uninsured
motor vehicle.� A motor vehicle is underinsured when the sum of the limits of
liability under all bodily injury and property damage liability bonds and
insurance policies available to a person against whom recovery is sought for
bodily injury or property damage is, at the time of the accident, less than the
applicable limits for underinsured motorist coverage afforded under the motor
vehicle insurance policy held by the person seeking that recovery.� A motor
vehicle shall not be considered an underinsured motor vehicle under this
section unless the limits of all bodily injury liability insurance or bonds
applicable at the time of the accident have been exhausted by payment of settlements
or judgments.� The limits of underinsured motorist coverage available to an
injured person shall be reduced by the amount he has recovered under all bodily
injury liability insurance or bonds;

���� (2)�� "uninsured motor
vehicle" means:

���� (a)�� a motor vehicle with
respect to the ownership, operation, maintenance, or use of which there is no
bodily injury liability insurance or bond applicable at the time of the
accident;

���� (b)�� a motor vehicle with
respect to the ownership, operation, maintenance, or use of which there is
bodily injury liability insurance in existence but the liability insurer denies
coverage or is unable to make payment with respect to the legal liability of its
insured because the insurer has become insolvent or bankrupt, or the
Commissioner of Banking and Insurance has undertaken control of the insurer for
the purpose of liquidation;
or

���� (c)�� a hit and run motor
vehicle as described in section 18 of P.L.1952, c.174 (C.39:6-78)
[
; or
]

.

���� (d)��
[
an automobile
covered by a special automobile insurance policy pursuant to section 45 of
P.L.2003, c.89 (C.39:6A-3.3)
]

(Deleted by amendment, P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill)
.

���� "Uninsured motor
vehicle" shall not include an automobile covered by a basic automobile
insurance policy;
a special automobile insurance policy;
an underinsured
motor vehicle; a motor vehicle owned by or furnished for the regular use of the
named insured or any resident of the same household; a self-insurer within the
meaning of any financial responsibility or similar law of the state in which the
motor vehicle is registered or principally garaged; a motor vehicle which is
owned by the United States or Canada, or a state, political subdivision or
agency of those governments or any of the foregoing; a land motor vehicle or
trailer operated on rails or crawler treads; a motor vehicle used as a
residence or stationary structure and not as a vehicle; or equipment or
vehicles designed for use principally off public roads, except while actually
upon public roads.

���� f.���� Notwithstanding the
provisions of this section or any other law to the contrary, a motor vehicle
liability policy or renewal of such policy of insurance, insuring against loss
resulting from liability imposed by law for bodily injury or death, sustained by
any person arising out of the ownership, maintenance or use of a motor vehicle,
issued in this State to a corporate or business entity with respect to any
motor vehicle registered or principally garaged in this State, shall not
provide less uninsured or underinsured motorist coverage for an individual
employed by the corporate or business entity than the coverage provided to the
named insured under the policy.� A policy that names a corporate or business
entity as a named insured shall be deemed to provide the maximum uninsured or
underinsured motorist coverage available under the policy to an individual
employed by the corporate or business entity, regardless of whether the
individual is an additional named insured under that policy or is a named insured
or is covered under any other policy providing uninsured or underinsured
motorist coverage.

(cf: P.L.2022, c.87, s.1)

���� 2.��� Section 45 of P.L.2003,
c.89 (C.39:6A-3.3) is amended to read as follows:

���� 45.� a.� In order to assist
certain low income individuals in this State and encourage their greater
compliance in satisfying the mandatory private passenger automobile insurance
requirements, the Legislature intends to establish a special automobile
insurance policy. The special automobile insurance policy shall be offered only
to individuals who qualify for and are actively covered by designated
government subsidized programs in the State.� For the purpose of this section,
"eligible low income individual" means an individual who meets the
income criteria established by the commissioner by regulation.� In setting the
low income criteria, the commissioner shall limit availability to those persons
eligible and enrolled in the federal Medicaid program.

���� b.��� As an additional option
to the mandatory coverage provided in sections 3 and 4 of P.L.1972, c.70
(C.39:6A-3 and 39:6A-4) or the alternative
[
covered
]

coverage

provided in section 4 of P.L.1998, c.21 (C.39:6A-3.1), an owner or registered
owner of an automobile registered or principally garaged in this State, who is
an eligible low income individual, may elect a special automobile insurance
policy providing the following coverage:

���� (1)�� Emergency personal
injury protection coverage, for the payment of benefits without regard to
negligence, liability or fault of any kind, only to the named insured and
dependent members of his family, as defined by the federal Medicaid program,
residing in his household, who sustain bodily injury as a result of an accident
while occupying, entering into, alighting from or using an automobile, or as a
pedestrian, caused by an automobile or by an object propelled by or from an
automobile, and to other persons sustaining bodily injury while occupying,
entering into, alighting from or using the automobile of the named insured,
with the permission of the named insured.� "Emergency personal injury
protection coverage" issued pursuant to this section means and includes
only payment of treatment for emergency care in an amount not to exceed
$250,000 per person per accident.� "Emergency care" means all
medically necessary treatment of a traumatic injury or a medical condition
manifesting itself by acute symptoms of sufficient severity such that absence
of immediate attention could reasonably be expected to result in: death;
serious impairment to bodily functions; or serious dysfunction of a bodily
organ or part.� Such emergency care shall include all medically necessary care
immediately following an automobile accident, including, but not limited to,
immediate pre-hospitalization care, transportation to a hospital or trauma
center, emergency room care, surgery, critical and acute care.� Emergency care
extends during the period of initial hospitalization until the patient is
discharged from acute care by the attending physician.� Emergency care shall be
presumed when medical care is initiated at a hospital within 120 hours of the
accident.� "Emergency personal injury protection coverage" shall also
include all medically necessary treatment of permanent or significant brain
injury, spinal cord injury or disfigurement after the patient is discharged
from acute care.� In the event benefits paid by an insurer pursuant to this subsection
are in excess of $75,000 on account of bodily injury to any one person in any
one accident covered by a policy issued or renewed prior to January 1, 2004,
that excess shall be paid by the insurer and shall be reimbursable to the
insurer from the Unsatisfied Claim and Judgment Fund pursuant to section 2 of
P.L.1977, c.310 (C.39:6-73.1);

���� (2)�� Death benefit in the
amount of $10,000;

���� (3)��
Liability insurance
coverage insuring against loss resulting from liability imposed by law for:

����
(a)�� property damage
sustained by any person arising out of the ownership, maintenance, operation,
or use of an automobile in an amount or limit of $5,000, exclusive of interest
and costs, for damage to property in any one accident;

����
(b)�� bodily injury or death
in an amount or limit of $5,000, exclusive of interests and costs, on account
of injury to, or death of, one or more persons in any one accident; and

����
(4)
�� The tort option
provided in subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8)
, which

shall apply to every named insured and any other person to whom the special
automobile insurance policy applies.

���� c.���� A special automobile
insurance policy shall not provide
[
liability,
]
collision,
comprehensive, uninsured or underinsured motorist coverage.

���� d.��� The policy form for
special automobile insurance policies shall be subject to the approval of the
Commissioner of Banking and Insurance and shall clearly and conspicuously set
forth the limitations on benefits provided under the policy.

���� e.���� The commissioner shall
approve the rating system to be used for a special automobile insurance policy,
which shall be administered by the plan created pursuant to section 1 of
P.L.1970, c.215 (C.17:29D-1), to provide a uniform Statewide rate to be utilized
by all insurers providing coverage through a special automobile insurance
policy. The rate established by the commissioner shall be sufficient to
reimburse the insurer for the cost of writing the policy and an amount set by
the commissioner to be forwarded to the Unsatisfied Claim and Judgment Fund to
offset claims paid by the Unsatisfied Claim and Judgment Fund.� The
commissioner may adjust the rate annually.

���� f.���� Special automobile
insurance policies shall be assigned to insurers pursuant to the apportionment
methodology of the plan created pursuant to section 1 of P.L.1970, c.215
(C.17:29D-1).� The number of policies assigned pursuant to this subsection
shall not be included in the determination of a competitive market pursuant to
subsection d. of section 27 of P.L.1990, c.8 (C.17:33B-15).

(cf: P.L.2003, c.89, s.45)

���� 3.��� This act shall take
effect on the 90th day next following enactment and shall apply to policies
issued, executed, renewed, or delivered on or after the date of enactment.

STATEMENT

���� This bill requires liability
insurance coverage for special automobile insurance policies.

���� Under the bill, special
automobile insurance policies will be required to have liability insurance
coverage, in an amount or limit of $5,000, to insure against loss resulting
from liabilities imposed by law for the bodily injury or death of one or more
persons in an accident.� The bill additionally requires each policy to maintain
liability insurance coverage, in an amount or limit of $5,000, to insure
against loss resulting from liabilities imposed by law for property damages.�
Finally, the bill removes special automobile insurance policies from the
definition of an �uninsured motor vehicle.�