New Jersey Legislature Passes Insurance Bad Faith Law

New Statute Benefits People Injured in Motor Vehicle Accidents

In January, 2022, the New Jersey legislature enacted and Governor Phil Murphy signed the New Jersey Insurance Fair Conduct Act (IFCA), which went into effect immediately. The new law requires insurance companies to act in “good faith” when settling claims based on uninsured (UM) or underinsured (UIM) provisions in a motor vehicle insurance policy.

The Provisions of the Insurance Fair Conduct Act

Under the IFCA, when the at-fault driver in an auto accident either has no bodily injury coverage or has policy limits that are inadequate to cover all of the injured party’s losses, the injured party may bring a lawsuit against the insurance provider under one of the following scenarios:

• The insurance company unreasonably denied a claim for payment or coverage of benefits
• The insurance company unreasonably delayed payment of benefits
• The insurance company violated the provisions of the New Jersey Unfair Claims Settlement Practices Act by engaging in “unfair methods of competition and unfair and deceptive acts or practices in the business of insurance”—examples of this type of conduct, as set forth in the statute, include failure to make a good faith effort to settle a claim, failure to fully investigate a claim in a timely manner, and acts construed as compelling an injured party to commence legal action to recover policy benefits

It’s important to understand that the new statute applies only when an injured party seeks benefits under a UM/UIM provision in a motor vehicle insurance policy. Injured parties who qualify, though, may ask the court to assess damages in excess of policy limits (up to three times the maximum amount allowed by the policy).

Contact Howard D. Popper, P.C.

At Howard D. Popper, P.C., we can help protect your rights. For a free initial consultationto discuss your options after a nursing home injury, contact our office online or call 973-993-8787 to set up an appointment. We have offices in Morristown and Newton.

We handle all personal injury claims on a contingent fee basis. You won’t pay any attorney fees unless we recover damages for your losses.