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New Jersey New Law Requires Mandatory Policy Limit Disclosure Before Lawsuit


The new law requiring insurance companies to disclose the policy limits before a lawsuit is filed to an injured party’s attorney will have a substantial positive impact on settlement discussions. Prior to this law, insurance companies did not have to tell an attorney representing an injured victim how much the insurance limit on their insured – typically the at fault party – had under their policy. On July 22, 2021, legislation passed (Session Bill S-1558/A-3444)requiring insurers who issue policies of automobile insurance in New Jersey to tell an insured’s policy limits to a licensed, practicing New Jersey attorney who makes a written demand.

An attorney’s request for the information must be in writing and contain the following information:

(1) a statement that the attorney represents an individual who was injured as a result of a motor vehicle accident with an insured covered under a private passenger automobile insurance policy issued by the insurer;

(2) the name and last known address of the insured;

(3) the date and time of the accident;

(4) a copy of the accident report, when available; and

(5) a statement from the claimant or the claimant’s attorney providing the claimant’s insurance information, including the claimant’s insurer, policy number, policyholder name, tort threshold selection, and personal injury protection coverage limit.

After this written notice is provided the insurance company only has 30 days within which to provide the policy limits and any umbrella or excess policy limit information on its insured. Thus, right after the accident the request can be sent and this vital, previously blocked, information must be provided to the injured party’s attorney.

Insurance Companies Cannot Block Access to the Policy Limits In New Jersey Personal Injury Cases

The power of this information cannot be understated. For example, someone may have a $100,000 auto policy limit but also a 1 Million Dollar umbrella policy above this amount that is potentially recoverable by the injured person. In the past, attorneys and their clients would never be able to obtain this information prior to filing suit. Now, attorneys will know early on how much insurance is available. This will likely cause cases to settle much earlier depending on the issues involved and how much insurance is available. This will also impact in a favorable way the strategy in going after a client’s own underinsured coverage. Therefore, if the negligent party does not have high coverage and the injuries in the case are serious, pursuit of the client’s underinsured motorist coverage, if available, can begin right away. Insurance companies fought this legislation because it levels the playing field and takes away a delay advantage that they had previously. Removing delays is a tremendous benefit for our injured clients.

This legislation takes effect immediately for all new accidents. The Department of Banking and Insurance will publish on its website the email address of each insurer issuing private passenger automobile insurance policies in New Jersey. The insurers email addresses will be used for the purpose of receiving attorneys’ requests for policy limit disclosures.

We have already implemented use of the statute with great success in our cases. As part of our law firm’s batch of letters that go out to insurance companies we request the policy limits of the insurance company for the other negligent drivers that cause the accident injuring our clients. This gives us a leg up on the potential recovery for our clients right from the outset.

Pre-Suit Negotiations Will Change Dramatically With Mandatory Limit Disclosure In NJ

Settlements will likely be reached much more quickly. For example, if someone has very serious injuries in an accident and the policy limits are only $100,000. The policy limits of $100,000 should be paid to the injured party right away whereas before we would not be able to learn about the policy limit sometimes years into the case. Moreover, if there is an umbrella policy covering the negligent party; this must be disclosed by the insurance company right from the outset. We have had many cases where the umbrella policy was not shown years into the case and sometimes just plain hidden. That game is over.

Please contact the personal injury lawyers with any questions on this new law or how it may impact your case.


John J. Scura III

John fights hard for his clients and tries to educate them so they understand what is going on with their particular legal problem. John has been Certified by The Supreme Court of New Jersey as a Civil Trial Attorney. Whether it is a personal injury case, bankruptcy case, litigation case or other type of matter, John wants his clients to participate in the decision making process toward solving their problem in the best way possible.

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