N.J. Gov. Lays Out Auto Insurance Package
By Mark E. Ruquet
NU Online News Service, Jan. 14, 4:01 p.m. EST?New Jersey Gov. James McGreevey laid out proposals to reform the state's troubled insurance market today–a plan he said would reduce auto fraud, crack down on uninsured motorists and retire the cost of past mistakes in the insurance system.
The Democratic governor, who unveiled his ideas in his state-of-the-state address to the legislature, proposed to cut costs by eliminating assessments on insurers that are charged for the Unsatisfied Claims and Judgement Fund. Several state underwriting corporations would be merged to better manage the system and eliminate duplication of work, he said.
To fight fraud, Mr. McGreevey's plan would allow companies to cancel policies when fraud is discovered and put those parties found guilty of fraud in a residual market.
The anti-fraud effort would also include a digitized, counterfeit-proof insurance card to allow for instant checks of insurance by Motor Vehicle officials and police.
To reduce the ranks of uninsured motorists in New Jersey, the proposal calls for penalties to be increased. The state would also create a new insurance policy that would cost low-income drivers a dollar a day and offer minimal medical coverage in case of an accident.
To help good drivers, companies would be allowed to move drivers with five points on their license to a sub-standard tier. The number is currently six.
The governor's plan also alters the threshold for being charged with an at-fault accident from $500 to $1,000. It would be indexed periodically after 2003 to reflect inflation.
When seeking a rate increase, companies would be required to notify their customers.
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