Scutari Bill To Make Insurance Companies Provide Full Coverage Of Employees

TRENTON – Legislation sponsored by Senator Nicholas P. Scutari to require insurance companies to provide full uninsured and underinsured motorist (UM/UIM) coverage to employees under their employers’ commercial policies was approved by the full Senate today.

“Right now, you have a situation where two employees, riding in the same vehicle, covered by the same commercial policy, can be injured identically in the same accident and receive different levels of coverage,” explained Senator Scutari D-Middlesex, Somerset, and Union). “The current system is arbitrary and misleading, leaving New Jersey’s employers and employees exposed when they thought they were completely covered. My bill will guarantee that companies get the coverage they are paying for, and hard-working New Jerseyans get the protection they deserve.”

The bill, S-1666, would stop insurance companies from using so-called “step-down” clauses to lower UM/UIM coverage for individual employees to the limits specified in their personal policies, unless they are specifically named as an insured person under their company’s commercial policy. On most commercial policies, only the company itself is named, meaning that the UM/UIM coverage employers are paying premiums for is virtually inaccessible, Senator Scutari said.

Senator Scutari stated that the bill would respond to the state Supreme Court’s ruling in Pinto v. New Jersey Manufacturers Insurance Company upholding the use of step-down clauses.

“Employers purchase uninsured and underinsured motorist coverage to make certain that their employees are protected on the road,” said Senator Scutari. “By eliminating step-down clauses, we can make sure that they are paying good money for protection they can rely on.”

The bill now heads to the Assembly for consideration.