The New Jersey Insurance Fair Conduct Act Means Big Changes For NJ Auto Insurers

• Published date: 31 January 2022
• Law Firm: Riker Danzig Scherer Hyland & Perretti
• Author: Riker Danzig Scherer Hyland & Perretti

On January 18, 2022, Governor Phil Murphy signed into law the New Jersey Insurance Fair Conduct Act (the "Act"). The Act takes effect immediately and represents a significant change in the law governing the conduct of automobile insurers in New Jersey.

The Act establishes a private cause of action for claimants who are injured in a motor vehicle accident and who are entitled to uninsured ("UM") or underinsured motorist ("UIM") coverage. Under the Act, a claimant may file a lawsuit against an insurer for: "1) an unreasonable delay or unreasonable denial of a claim for coverage or for payment of benefits; or 2) any violation of the provisions of section 4" of a separate statute, the New Jersey Unfair Claims Settlement Practices Act (N.J.S.A. 17:29B-4), which governs unfair methods of competition and unfair and deceptive acts or...