August 20, 2018
Garden State legislators may be about to cripple the state’s insurance markets with a liability expanding bill on “bad faith.” According to Frank Jones, an independent insurance agent operating in the state, the bill currently before the Assembly (A-4293/3850) appears to increase consumer protections at first glance. But this impression may be deceptive.
By allowing plaintiffs to sue insurance companies for delays in processing claims, the bill would result in a flood of lawsuits that many insurance carriers would be obliged to settle rather than pay to defend. In Jones’ view, these lawsuits would inevitably force insurance companies to increase premiums, and would reduce competition by forcing smaller insurers out of the New Jersey market.