On December 10, the Assembly Financial Institutions and Insurance Committee held an informational hearing on A231, which would create a private cause of action for bad faith in settlement of certain insurance claims. NJCJI testified against the bill, which would have devastating effects for New Jersey’s business community and raise insurance premiums for most New Jersey residents. Continue reading
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Tag Archives: Bad Faith
NJCJI Opposes State-Level Patent Reform
As proponents of an equitable and predictable civil justice system, NJCJI appreciates that meritless patent litigation and the significant costs it imposes on all New Jersey businesses is a concern. And we share the alarm over “patent trolls” who are taking advantage of the proliferation of patents, especially in the IT realm, to make meritless demands and threaten frivolous litigation. However, NJCJI does not support passing a state-level fix to the patent law system.
Alida Kass, NJCJI’s Chief Counsel, voiced our opposition to A-2462, which would create a state court cause of action against persons who pursued a patent claim in bad faith, with the Assembly Commerce Committee on October 2, 2014. Continue reading
Supreme Court’s 2014-15 Term of Great Interest to NJCJI
The New Jersey Supreme Court will convene its 2014-15 term on September 8. As the state’s highest judicial body, the decisions of the New Jersey Supreme Court have a direct and significant impact on individuals residing in the state and organizations located or doing business here. The New Jersey Civil Justice Institute is closely following the work of the court this term, as we have several cases pending before it. Continue reading
NJCJI Teleforum to Recap the Oral Arguments in Wadeer Case
On September 9, the New Jersey Supreme Court will hear oral arguments in Wadeer v. New Jersey Manufacturers Insurance Co., a case that will have a big impact on the state’s laws surrounding “bad faith” in the insurance industry. NJCJI is hosting a post-oral argument policy teleforum on this important case on September 11 at noon.
Bad faith bill reintroduced
Superstorm Sandy did something few insurance brokers could do: it forced homeowners to, in some cases, read their insurance policies for the first time.
Many of us opt for lower premiums in exchange for higher deductibles. Others quickly sign on the dotted line and hope we never meet the devil lurking in the details. But when the worst happens, as many New Jerseyans experienced late last year, customers expect their insurer to cover their losses as defined in their coverage.
New Jersey Manufacturers Insurance Co. (NJM) CEO Bernie Flynn told a legislative committee last month that they expect payouts to reach $300 million. State Farm has made a point of expediting their 30,000 Sandy-related claims. On some occasions, however, an insurer may fail to live up to their end of the agreement and deny payment to a customer. New Jersey consumers are able to file suit against their insurer in these instances. But recently reintroduced legislation threatens to add more bureaucracy and litigation into an already stressed civil justice system.
S-2460, the covertly dubbed “Consumer Protection Act of 2012,” is a new lease on trial lawyers’ attempt to create a new cause of action for ‘bad faith’ (S-766/A-3434). It wouldn’t simply codify existing case law with respect to ‘bad faith;’ rather, a court would only need to find that an insurer acted ‘unreasonably’ in order to win a bad faith case, adding subjectivity and the potential for awards beyond one’s coverage.
Acting Department of Banking and Insurance commissioner Kenneth Kobylowski noted that New Jersey’s strong homeowners’ insurance market had rates near the national average despite having property values among the highest in the country.
“To have average premiums in the middle of the marketplace is just a testament to how stable, how competitive and how well-run our homeowners’ market is,” he told NJ BIZ.
But if the cost of doing business increases for New Jersey’s insurance industry, we can all expect our premiums to rise.
‘Bad faith’ bill is bad policy for New Jersey
S-2460, the covertly dubbed “Consumer Protection Act of 2012,” is a new lease on trial lawyers’ attempt to create a new cause of action for ‘bad faith’ (S-766/A-3434).
That bill, S-2460, is now scheduled for a hearing on Monday, March 4th, in the Senate Commerce Committee.
Proponents argue that this bill will help policyholders who have been affected by Superstorm Sandy by codifying existing case law, protecting their right to sue insurance companies who fail to pay claims to which they are entitled. In reality, it adds uncertainty and greater consumer costs to New Jersey’s homeowners’ insurance market:
- Very few victims of Sandy will be helped. Those who lacked flood coverage, had inadequate coverage limits, or could not afford their deductible could not file suit under this bill.
- Policyholders would be able to recover damages in excess of the terms of their insurance contract. In addition, they would be able to file for attorneys’ fees, court costs, and prejudgment interest dating to the time the suit was filed.
- All New Jersey insurance customers, including businesses which purchase commercial insurance, will pay higher insurance premiums as a result.
And as we noted last month, many of us opt for lower premiums in exchange for higher deductibles. Others quickly sign on the dotted line and hope we never meet the devil lurking in the details. But when the worst happens, as many New Jerseyans experienced late last year, customers expect their insurer to cover their losses as defined in their coverage.
New Jersey Manufacturers Insurance Co. (NJM) CEO Bernie Flynn told a legislative committee last month that they expect payouts to reach $300 million. State Farm has made a point of expediting their 30,000 Sandy-related claims. On some occasions, however, an insurer may fail to live up to their end of the agreement and deny payment to a customer. New Jersey consumers are able to file suit against their insurer in these instances. But recently reintroduced legislation threatens to add more bureaucracy and litigation into an already stressed civil justice system.
S-2460, the covertly dubbed “Consumer Protection Act of 2012,” is a new lease on trial lawyers’ attempt to create a new cause of action for ‘bad faith’ (S-766/A-3434). It wouldn’t simply codify existing case law with respect to ‘bad faith;’ rather, a court would only need to find that an insurer acted ‘unreasonably’ in order to win a bad faith case, adding subjectivity and the potential for awards beyond one’s coverage.
Acting Department of Banking and Insurance commissioner Kenneth Kobylowski noted that New Jersey’s strong homeowners’ insurance market had rates near the national average despite having property values among the highest in the country.
“To have average premiums in the middle of the marketplace is just a testament to how stable, how competitive and how well-run our homeowners’ market is,” he told NJ BIZ.
But if the cost of doing business increases for New Jersey’s insurance industry, we can all expect our premiums to rise.
Lacking support, S-2460 held by Senate Commerce Committee
The so-called ‘bad faith‘ bill was held by the Senate Commerce Committee, due to a lack of support. Bad faith bill is bad policy for New Jersey. Read NJCJI’s position here.