New legislation introduced in the New Jersey Senate aims to empower both drivers and insurers with an enhanced tool to resolve disputes over vehicle damage claims by requiring personal auto insurance policies to include a “right to appraisal” provision.
Senate Bill 4534 would mandate that all personal automobile insurance policies issued in the state include a clause allowing either the policyholder or the insurer to appoint a “competent and disinterested” appraiser if there is disagreement over the actual cash value or extent of a loss following an auto claim. This would apply to both repairable and total losses, as well as third-party liability settlement offers.
Under the proposed bill, once one party notifies the other of its intent to invoke the appraisal provision and names its appraiser, the opposing party would have 20 calendar days to designate their own. The two appraisers would then each have 20 business days to independently assess the vehicle and determine the loss or settlement amount.
If the appraisers are unable to agree, the dispute would be escalated to a neutral umpire selected jointly by the appraisers. If they fail to agree on an umpire within 15 calendar days, either party could petition a judge to appoint one. The decision made by the umpire or judge would be final, according to the bill.
Supporters of the measure argue the provision could provide policyholders with greater fairness and transparency in claim settlements, while critics have yet to publicly comment. The Insurance Council of New Jersey has not yet commented on the matter.
Similar legislation was considered in Washington state in 2024 but ultimately did not progress past the committee stage. Compared with the Washington proposal, the New Jersey bill outlines longer response and resolution timelines, which some lawmakers say may make the process more accessible and manageable for consumers and insurers alike.
According to 2024 data from BestLink, the largest private passenger auto insurers in New Jersey by direct premiums written were: Berkshire Hathaway Insurance Group (23.08%), Progressive Insurance Group (16.01%), NJM Insurance Group (13.14%), Allstate Insurance Group (9.67%), and State Farm Group (9.38%).
If passed, Senate Bill 4534 could set a precedent for how auto claim disputes are handled in New Jersey, potentially influencing similar legislative efforts in other states.
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