Trenton – Legislation sponsored by Senate President Pro Tempore M. Teresa Ruiz, which would protect consumers against paying for duplicative car insurance, cleared the Senate Commerce Committee today.
“There is no reason, other than greed, that people should be paying for car insurance twice. Consumers have a right to know what is being purchased on their behalf. For most New Jerseyans a car is a necessity, and for many, it is a necessity that strains their household budget,” said Senator Ruiz (D-Essex). “This legislation is crucial in protecting consumers against paying more than they have to on their monthly expenses.”
The bill, S-2998, would require consumer lenders to disclose to borrowers when motor vehicle insurance products are added to an auto loan. Consumer lenders providing car loans would have to provide notification that insurance coverage is a condition of the loan agreement and coverage is being purchased to meet this requirement at the time of purchase.
Additionally, under the bill, within 30 days consumers must be informed with the details of the policy the lender purchased at the consumer’s expense. This would include the insurer, an estimate of the total cost over the life of the loan, and the fact that the policy can be cancelled if the borrower purchases insurance elsewhere and provides documentation of that coverage. Often, a consumer can shop around a find an insurance policy for a less expensive rate than the policy the lender has secured.
The bill was released from committee by a vote of 5-0.