The National Association of Insurance Commissioners has announced that New Jersey drivers may see their rates jump higher for the first time in years. The Association notes that the increase is due to the ramping costs of the state’s personal injury protection (PIP) policies. The Association has released a report which shows that the last time auto insurance rates rose was in 2009, when PIP rates rose to $1,218. No news on how much the new rates will be has yet been released.
Many states have laws that require drivers to have PIP coverage. This type of insurance ensures that insurers will pay for medical coverage resulting from a car accident no matter who is at fault. Because of these laws, PIP has been the target of fraudulent activities. Florida is home to several staged auto accidents that were constructed in an attempt to exploit the regulations governing PIP coverage. New Jersey has similar laws and the Association notes that fraud in the state may be the primary culprit behind the rising insurance rates.
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There are a number of other factors contributing to higher rates, but fraud remains one of the most troubling problems in the state. Regulators have taken steps to combat these events, but the New Jersey Legislature has not yet passed any new laws that would make it more difficult for criminals to exploit the system.
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