TCA Legal Comment – New Jersey Increase in Minimum Insurance Limits Effective as of July 1


New Jersey Increase in Minimum Insurance Limits Effective as of July 1

June 24, 2024

Earlier this year, New Jersey enacted a law that increased the minimum limits of liability insurance coverage required for covered commercial motor vehicles (CMVs) to $1.5 million for CMVs 26,001 pounds or higher and $300,000 for CMVs weighing between 10,001 and 26,001 pounds. The new minimum limits may be satisfied by a commercial automobile policy, fleet insurance, a commercial umbrella policy, commercial excess coverage, similar insurance policy, or a combination of these types of coverage.

The statute provides the increased minimums apply to CMVs registered or principally garaged in New Jersey, which left open questions as to what it means to be registered in New Jersey and whether it applied to vehicles in interstate operations. Offering some additional guidance, the Acting Commissioner of Insurance issued Bulletin No. 24-07 in late May in which he explained that the new law applies to CMVs that are base-plated or “at-home” in New Jersey and engaged in intrastate commerce. There does not appear to be a threshold amount of intrastate commerce required, which suggests the requirement applies to a vehicle that does any mix of interstate and intrastate moves. Vehicles owned or operated by carriers with authority to engage in interstate commerce are subject to federal minimum limits of liability insurance set by the Federal Motor Carrier Safety Administration (starting at $750,000 for general, non-hazardous freight).

Although the statute provided a July 1 effective date, the new limits apply to policies initiated on, or renewed, after July 1. There remain a number of outstanding questions with respect to implementation of the requirement and the applicability of the new law to interstate operations. For brokers hiring carriers and seeking to verify compliance with minimum insurance requirements, it is unclear how to determine whether a carrier’s vehicle is subject to New Jersey’s increased minimum limits. For more information, contact Greg Feary or Prasad Sharma.