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TRENTON – New Jersey regulators have informed state insurance companies that they must reduce premiums retroactively for two months and refund the difference to policy holders because stay-at-home restrictions reduced the risk of auto accidents and other types of claims.
A number of insurance companies began taking these steps voluntarily last month, but the move by the state Department of Banking and Insurance requires the change by those companies that have not yet enacted it.
In a May 12 letter, Commissioner Marlene Caride said the COVID-19 pandemic and resulting restrictions have “caused the projected loss exposures of many insurance policies to become overstated or misclassified.”
The lines of insurance covered in the letter include:
- Private and commercial automobile insurance
- Workers compensation insurance
- Commercial multiple-peril insurance
- Commercial liability insurance
- Medical malpractice insurance
- Other lines of coverage where measures of risk have been substantially overstated as a result of the COVID-19 pandemic
Insurer must make the initial premium refund or other adjustment no later than June 15.
