E-Card and Anti-Fraud Measures Become Law in New Jersey

TRENTON, N.J. - New Jersey Governor Chris Christie recently signed two key insurance bills into law that move the state in the right direction by allowing drivers to use their smartphone or another device to show proof of insurance and making reverse rate evasion an act of insurance fraud, according to the Property Casualty Insurers Association of America (PCI).

Governor Christie signed A.3905/S.2680 which authorizes operators of motor vehicles to display electronic proof of insurance. There are now 40 states that have enacted e-card legislation.

“This bill includes important consumer protections while giving policyholders a user-friendly and convenient way to electronically access their insurance card,” said Micaela Isler, assistant vice president, state government relations for PCI. “This legislation was advanced in recognition of the widespread use of mobile technology and the insurance industry’s desire to meet policyholder needs and expectations.”

With A.2281/S.1727 New Jersey will take a tougher stand on a form of insurance fraud called “reverse rate evasion, which occurs when a motorist lives in one state, but buys insurance for his or her vehicle in another state in order to avoid paying the appropriate insurance rate. This new law makes reverse rate evasion a form of insurance fraud and provides for civil and criminal penalties. 

“Reverse rate evasion is a common problem in New Jersey and this along with other forms of underwriting fraud siphons away billions of dollars, which forces all drivers to pay more for insurance,” said Isler. “The property and casualty insurance industry and its partners are committed to controlling auto insurance costs and anti-fraud measures such as this prove beneficial for all drivers in New Jersey.”

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PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $183 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 32 percent of the commercial property and liability market and 34 percent of the private workers compensation market.

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Quick facts

40 states that have enacted legislation that allow drivers to electronically show proof of insurance
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New Jersey is taking a tougher stand on insurance fraud
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Underwriting fraud siphons away billions of dollars, which forces all drivers to pay more for insurance
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Quotes

This bill includes important consumer protections while giving policyholders a user-friendly and convenient way to electronically access their insurance card
Micaela Isler, assistant vice president, state government relations for PCI
The property and casualty insurance industry and its partners are committed to controlling auto insurance costs and anti-fraud measures such as this prove beneficial for all drivers in New Jersey
Micaela Isler, assistant vice president, state government relations for PCI