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Bill

RB

Bill

A 4562

Requires automobile insurance carriers offer policies with 12-month term.

2026-2027 Regular Session Introduced by Rosy Bagolie

Insurers offering standard auto policies must provide a 12-month term option, while still offering shorter or longer terms.

Reported out of Asm. Comm. with Amendments, and Referred to Assembly Consumer Affairs Committee
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Bill Summary · A 4562

Overview

Bill A 4562 (Session 222, New Jersey) would require automobile insurers that offer standard or basic auto insurance policies to provide an option to purchase the policy with a 12-month term. The measure does not prevent insurers from offering policies with shorter or longer terms. It becomes effective 120 days after enactment.

Main purpose and intent

  • Ensure consumers have a 12-month term option for standard/basic auto insurance policies.
  • Promote user-friendly pricing and renewal cycles by extending the term length, which may stabilize premiums and simplify budgeting.
  • Preserve flexibility for insurers to continue offering non-12-month terms in addition to the 12-month option.

Key provisions

  • Term option requirement: An automobile insurer that offers a standard or basic policy must provide the option to purchase the policy with a 12-month term.
  • Additional options preserved: The requirement is not intended to limit insurers’ ability to offer policies with shorter or longer terms; those terms may still be available.
  • Effective date: The act takes effect 120 days after enactment.

Who is affected

  • Automobile insurers selling standard or basic auto policies in New Jersey.
  • Auto insurance consumers who will have a new 12-month term option for standard/basic policies.

Procedural and timeline aspects

  • Introduction and referrals:
    • Introduced March 10, 2026; referred to Assembly Financial Institutions and Insurance Committee.
    • Reported out of Assembly Committee with amendments and referred to Assembly Consumer Affairs Committee on June 4, 2026.
  • Effective date: 120 days after enactment (to be specified upon enactment).

Potential impact

  • Consumers: Greater choice in policy terms, potentially more stable premium planning and renewal cycles if the 12-month term is favored by pricing structures.
  • Insurers: Must implement or maintain a 12-month term option in standard/basic policies, while retaining freedom to offer other term lengths; administrative and pricing adjustments may be required to accommodate the new option.
  • Market dynamics: Could influence renewal behavior and discount structures if longer-term pricing remains in effect across a 12-month period.

Notes

  • The bill is sponsored with a co-sponsor (Rosy Bagolie).
  • The textual language clarifies that the 12-month term option is an addition to, not a replacement for, existing term offerings.

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

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