The New Jersey Insurance Fair Conduct Act Passed—Awaits Governor's Signature
Update: The New Jersey Insurance Fair Conduct Act was signed into law by Gov. Phil Murphy on January 18, 2022. See The New Jersey Insurance Fair Conduct Act--Signed Into Law. (Original story below).
On January 10, 2022, just before the conclusion of the 219th New Jersey Legislature, The New Jersey Insurance Fair Conduct Act (S1559/A1659) squeaked through both houses and now sits on the desk of Governor Phil Murphy.
The new law establishes a private cause of action for first-party claimants regarding certain unfair or unreasonable practices by their insurer. It continues to be hotly contested by the insurance industry, as it allows claimants to sue their insurer for “unreasonably” denying or delaying claims for uninsured or underinsured motorist benefits. The new law also permits lawsuits to be filed for violations of New Jersey’s Unfair Trade Practices Act. N.J.S.A 17:29B-4.
Damages under the new law include: “actual damages,” which the act defines as “actual trial verdicts that shall not exceed three times the applicable coverage amount,” pre- and post-judgment interest, reasonable attorney’s fees, and reasonable litigation expenses.
Having cleared both houses, The New Jersey Insurance Fair Conduct Act has been sent to Governor Phil Murphy for his consideration.
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