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Bill

JB

Bill

S 3187

Prohibits motor vehicle liability insurance policy from restricting amount that may be recovered under policy.

2026-2027 Regular Session Introduced by Jon Bramnick and 2 co-sponsors

New Jersey bill prohibiting insurance companies from capping maximum liability payouts on auto policies, eliminating upper limits on claim recoveries.

Reported from Senate Committee, 2nd Reading
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WeVote Research Nonpartisan
Bill Summary · S 3187

Legislative bill overview

S 3187 prohibits motor vehicle liability insurance policies from including caps or restrictions on the maximum amount a policyholder can recover under their coverage. This bill would require insurers to provide full liability coverage without upper limits on payouts, fundamentally changing how auto insurance policies are structured in New Jersey.

Why is this important

Currently, most auto insurance policies have maximum liability limits (e.g., $15,000 or $25,000 per accident), which can leave injured parties undercompensated if damages exceed the policy limit. This bill would eliminate those caps, potentially providing greater protection to accident victims and policyholders, though it would likely increase insurance premiums substantially since insurers would have unlimited exposure.

Potential points of contention

  • Insurance cost increases: Removing liability caps would significantly raise premiums for all drivers, as insurers can no longer predict maximum exposure per claim
  • Market viability concerns: Some insurers may exit the New Jersey market if unlimited liability becomes mandatory, potentially creating availability and affordability problems
  • Retroactive application questions: Unclear whether this applies to existing policies or only new ones, creating potential implementation challenges
  • Alternative solutions: Critics may argue other approaches (like indexed minimum coverage or guaranty funds) better balance victim protection with affordability

Compiled from official sources — confirm details with the bill’s official record.

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