ASSEMBLY, No. 2305

STATE OF NEW JERSEY

INTRODUCED SEPTEMBER 16, 1996

By Assemblymen DALTON and GARCIA

An Act concerning cancellation of automobile insurance policies and amending P.L.1968, c.158.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 2 of P.L.1968, c.158 (C.17:29C-7) is amended to read as follows:

    2. (A) A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons:

    (a) Nonpayment of premium [or nonpayment of a residual market equalization charge imposed pursuant to the provisions of section 20 of P.L. 1983, c. 65 (C. 17:30E-8)] , except that a notice of cancellation for nonpayment of premium shall not be effective if payment of the amount due is received by the insurer within five business days of the effective date of that notice; or

    (b) The driver's license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period.

    (B) This section shall not apply to any policy or coverage which has been in effect less than 60 days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy.

    (C) Modification of automobile physical damage coverage by the inclusion of a deductible not exceeding $100.00 shall not be deemed a cancellation of the coverage or of the policy.

    (D) This section shall not apply to nonrenewal.

(cf: P.L.1988, c.119, s.27)

    2. This act shall take effect immediately.

STATEMENT

    This bill provides that the cancellation of an automobile insurance policy for nonpayment of premium shall not be effective if payment of the amount due is received within five business days of the effective date of notice of cancellation.

Provides five-day grace period before cancellation of automobile insurance policy for nonpayment of premium becomes effective.