February 20, 2024

Navigating New Jersey’s New Insurance Mandate

In an industry where fuel, maintenance, and insurance are paramount, New Jersey’s recent insurance legislation introduces significant changes, particularly in liability coverage requirements for carriers. Joe Schreiner, Executive Vice President of Sales at Reliance Partners, sheds light on the situation, emphasizing the potential nationwide impact of these new regulations during his feature on the WHAT THE TRUCK?!? podcast.

The basis of the legislation increases the liability insurance requirement for vehicles over 26,000 pounds from the standard $750,000 to $1.5 million. This adjustment not only affects New Jersey-domiciled carriers but also raises questions about its applicability to interstate carriers operating within the state. The uncertainty around the law’s reach hints at possible similar actions by other states, prompting a need for the trucking industry to stay alert to changes.

The financial implications are substantial. Doubling liability coverage can significantly increase operational costs, with carriers potentially facing a 40-60% increase in their insurance expenses. “If you have $1 million in coverage and need another $1 million for your entire fleet, you’re looking at an additional 40-60% on top of your primary auto liability limits,” explains Schreiner. This could lead to higher risks or more expensive premiums for carriers striving to meet these new requirements.

Insurance companies are also under pressure, as offering higher coverage limits may require taking on more risk or increasing premiums due to the hardening of reinsurance and insurance capacity markets.

As the trucking industry navigates this regulatory landscape, it’s clear that more states may follow New Jersey’s lead, influenced by governmental efforts to raise insurance minimums. This situation, combined with new Department of Labor regulations, sets the stage for potentially rocky years ahead.

Visit the original article on FreightWaves and explore how Reliance Partners can help your business navigate through these challenging times.