New Jersey Increases Minimum Insurance Limits

The New Jersey legislature recently changed its financial responsibility minimums as they apply to commercial motor vehicles and pedicabs (i.e., taxis). Under the new law, New Jersey will now require commercial motor vehicles (CMVs) to maintain proof of financial responsibility of $1.5 million for CMVs 26,001 lbs. and higher, certain passenger carriers, and those transporting hazardous materials. CMVs weighing between 10,001 and 26,001 lbs. must maintain limits of $300,000. The coverage required by the statute may be satisfied by a commercial auto policy, fleet insurance, a commercial umbrella policy, commercial excess coverage, a similar insurance policy, or any combination of these types of coverage.

There is no indication in the legislation that it is intended to apply only to intrastate New Jersey operations. There appears to be indirect evidence that the intent is that the new higher minimum limits under this legislation will apply to all commercial vehicles within its scope, whether in interstate or intrastate operations. The Federal Motor Carrier Safety Administration (FMCSA) has considered increasing the federal minimum insurance limits applicable to CMVs. To date, it has not elected to do so. Whether New Jersey’s statute will cause other states or even FMCSA to similarly increase their limits remains to be seen.

For more information, contact Greg Feary, Jeffrey Toole, Shannon Cohen, or Prasad Sharma.