Thanks to a law that goes into effect April 10, issuing an insurance certificate with false and/or misleading information concerning property or casualty insurance in New Jersey is considered a violation of the State Insurance Fraud Prevention Act.
Violators of the law are punishable by fines and penalties of up to $15,000, depending on the number of violations incurred.
The new law is intended to curb the misrepresentation of the extent of a policyholder’s coverage.
A JD Supra report said that the law applies to any individual that either prepares, presents, or causes to be presented a certificate of insurance containing false information, as well as to those who would conspire with another to falsify information on certificates.
Moving forward, contractors should ensure that the information in insurance certificates that they provide to their customers precisely describes the coverage of the underlying policies.
In addition to requiring accurate insurance certificates, the law has a provision which states that insurance certificates do not serve as proofs of coverage. Homeowners looking for assurances of coverage will need their contractors to provide the actual policies—endorsements included—to confirm that the contractors have the required coverage.
