The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) is speaking out against the claims certain insurers have made about proposed legislation that intends to protect collision shops and consumers in a court of law when battling unfair insurance practices.
Currently in New Jersey, there is no private right of action for a violation of the regulations that govern fair claim settlement practices, even when an insurer abuses a claimant or mishandles a claim by straying from the current regulations. The proposed bill S-2144 would change that by creating a private right of action where a claimant may file a civil suit in a court of law to address and resolve claim settlement issues. It would enforce existing regulations and subject an insurer to the same penalties any other business would be subjected to if they were to cheat a consumer during the course of a business transaction.
“Certain insurers are starting to send out letters to their insureds, making false and misleading comments, in my opinion, in an effort to prevent the legislation from becoming law,” said Charles Bryant, executive director of AASP/NJ. “One claim that is being made is that the New Jersey Legislature is fast-tracking the legislation that will substantially increase the price of personal automobile and homeowners’ insurance coverage in the state. This is certainly incorrect and apparently stated to mislead people at best. This legislation is not on the fast track. It was first introduced in March 2018 and then referred to the Assembly Financial Institutions and Insurance Committee that June. It has been stalled there ever since. Bills similar to this have been presented in the past and were buried in the same way and eventually dumped.”
Bryant stressed that this bill would not substantially increase the price of personal and homeowners’ insurance coverage as some insurers are telling their insureds.
“An insurer cannot abuse its insured or improperly deny an insured’s claim and then be forced by a court of law to pay what the insured was actually owed or entitled to – along with court cost, attorney fees and treble damages – and then use those additional costs that resulted from their own wrongdoing as a basis to obtain a rate increase.”
The letters also suggest that insureds should call their legislators to tell them the legislation is a bad deal.
“Well, insurers are right that consumers should be calling their legislators, but not for the reason the insurers want them to do so. Consumers – especially those who have been abused by an insurer when they put in a claim to cover a loss and were either shortchanged on their claim or had their claim improperly denied and received no help from the Department of Insurance – should be calling their legislators and telling them to vote ‘yes’ to this bill. Every collision shop in New Jersey should be contacting its legislators and requesting that they support this legislation.”
“This bill holds the insurance company responsible,” said Jerry McNee, president of AASP/NJ. “It puts their feet to the fire. Without it, it’s the wild, wild west. Nobody is enforcing the rules and regulations now. For them to say that this will increase premiums…that is simply untrue. It’s smoke and mirrors. If they were doing what they were supposed to, this would not be an issue. Insurance companies are in fear of this passing.”
Added Bryant, “Every shop owner should be educating their customers about these issues and how this legislation can make a change for the better. The only way insurers are ever going to follow the regulations that govern fair claim settlement practices is when or if they are held accountable for their own actions. This legislation does exactly that.”