New Jersey residents may see some relief from insurance premiums due to COVID-19 pandemic. Recently, the New Jersey Department of Banking and Insurance ordered insurers to provide financial relief to residents and businesses.
The guidance was signed last week by Governor Phil Murphy and extends the grace periods during which insurance companies will not be able to cancel a policy due to nonpayment of a premium. The order includes health insurance companies as well as life and property and casualty insurers.
The executive order puts in a place a minimum 60-day grace period for health and dental insurers while upping the grace period to 90 days for life insurance and property and casualty insurers. This includes New Jersey homeowners, renters and car insurance.
Once the executive order was signed, the New Jersey Department of Banking and Insurance directed health and dental insurance companies writing policies in the state to start providing a grace period for premiums for at least 60 days.
The department also directed life insurance companies as well as property and casualty insurers to immediately offer a grace period of at least 90 days. However, insurance customers must contact their insurance company in order to take advantage of the extended grace period as well as discuss payment options to pay their premium over time after the grace period is over.
In addition to a grace period, insurers must waive late fees, here is wording of the order for property and casualty insurers which write homeowners, renters and auto policies:
- Provide a 90-day grace period to pay insurance premiums and continue paying claims during this period; allow policyholders to pay premiums not paid during the 90-day period over the remainder of the current policy term or in up to 12 months, whichever is longer;
- Waive late payment fees otherwise due and not report late payments to credit rating agencies;
- Ensure that late payments during the 90-day period are not considered in any future premium calculations at any time (i.e. applicable late payments should not be counted for any rating, pricing, tiering attributes, etc.); and
- Permit the grace period to be applied to all installment payments, including renewal down payments, provided that the insured provides notice to the insurer that they wish to continue coverage.
The Department also directed insurance carriers to post all information related to the grace period on their websites as well as provide all policyholders with a written description of the terms of the grace period. The department also stated that they will continue to monitor the situation to see if the emergency grace period needs to be extended in the future.