New Jersey law will raise auto insurance rates in 2023

A new law in New Jersey that takes effect on Sunday means more than a million drivers will see higher car insurance bills.

Under the law signed by Gov. Phil Murphy over the summer, the minimum amount of liability coverage will go from $15,000 to $25,000 on policies purchased or renewed after Jan. 1.

Plans must also include $50,000 in coverage for accidents in which more than one person was injured or killed. That coverage was previously set at $30,000.

The state Department of Banking and Insurance estimated that 1.1 million to 1.2 million drivers carry the current minimum coverage.

Liability minimums will be raised again in three years under the law. Starting in 2026, it will be $35,000, with coverage for a multiple injury accident raised to $70,000.

The law is a pared-down version of what Senate President Nick Scutari originally proposed. He wanted to require drivers to carry $250,000 in personal injury protection.

Scutari, during a hearing on the bill, said the higher minimums are needed to better protect drivers.

Opponents argued the new law will unnecessarily impose higher costs on drivers.

“We’re forcing people to make choices that are not good for anybody,” said John Harmon, president of the African American Chamber of Commerce of New Jersey, in an interview with NJBIZ.