N.J. Admin. Code § 11:3-15.6

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:3-15.6 - Minimum standards for Coverage Selection Forms

(a) Each insurer shall have a separate Coverage Selection Form for the Standard Policy and for the Basic Policy using the text found in the Appendix, Exhibits 1 and 3 incorporated herein by reference.

(b) The Coverage Selection Forms shall contain a statement advising the insured or applicant that additional information concerning coverages or premiums is available by contacting the insurer or the producer. Insurers that write at least two percent of the New Jersey private passenger automobile market shall provide a toll-free telephone number for this purpose.

(c) Except as otherwise provided in the text, each Coverage Selection Form shall be printed in at least 10-point type on a paper size that is easily readable.

(d) In addition to the required text, each Coverage Selection Form shall include space at the top for the consumer's name and any other necessary information such as policy number, etc. The bottom of each Coverage Selection Form shall have space for the consumer's signature and date.

1. Text in the Appendix, Exhibits 1 and 3 in italics, thus, is instructions or options for the insurer and should not be printed in the Coverage Selection Form.

2. Text in uppercase letters denotes section headings, defined terms or is for emphasis. Insurers are not restricted to uppercase for these purposes in formatting the Coverage Selection Forms.

(e) An insurer may expand the form to solicit additional relevant information, including, but not limited to, the names of resident relatives eligible for PIP benefits.

(f) Each Coverage Selection Form shall include the range of premium rate differences as indicated by the text in the Exhibits. Each insurer shall determine the range of premium rate differences for use in these sections. Premium rate differences for the Lawsuit Options in the Standard Policy Coverage Selection Form, Appendix, Exhibit 1 shall be calculated according to (g) below. When the range of premium rate differences on a Coverage Selection Form changes for any reason, including, but not limited to, rate changes, a new Coverage Selection Form with the current numbers shall be filed with the Department in accordance with 11:3-15.4(d).

(g) Each insurer shall calculate the percentage and dollar change in premium (or rate) from the selection of the No Limitation on Lawsuit Option in accordance with (g)1 through 4 below. In these calculations, premium (or rate) shall include any expense fee.

1. The Percentage Change Calculation: The range of percentage increase in the bodily injury liability premium arising from the selection of the No Limitation on Lawsuit Option shall be calculated as follows:

i. The low end of the percentage range shall be produced by calculating the percentage increase in the bodily injury liability premium of a policy with a $ 250,000/$ 500,000 split limit or a $ 500,000 single limit for a change from the Limitation on Lawsuit Option to the No Limitation on Lawsuit Option. This calculation shall be made for the territory with the lowest basic limit Limitation on Lawsuit Option rate, and shall assume standard tier, pleasure usage by an age 30-64, married male principal operator.

ii. The high end of the percentage range shall be produced by making the same type of calculation using a policy with minimum limits for the territory with the highest basic limit Limitation on Lawsuit Option rate, and shall assume business usage by a standard-tier, 22 year old, unmarried male principal operator.

2. The Dollar Change Calculation: The range of dollar increase in the bodily injury liability premium arising from the selection of the No Limitation on Lawsuit Option shall be determined by subtracting the Limitation on Lawsuit Option rate from the comparable No Limitation on Lawsuit Option rate for the following two rating examples:

i. The low end of the dollar range shall be a policy with minimum limits for the territory with the lowest basic limit Limitation on Lawsuit Option rate, and shall assume standard tier, pleasure usage by an age 30-64, married male principal operator.

ii. The high end of the dollar range shall be calculated at a $ 250,000/$ 500,000 split limit or a $ 500,000 single limit policy for the territory with the highest basic limit Limitation on Lawsuit Threshold Option, and shall assume business usage by a standard tier, 22 year old, unmarried male principal operator.

iii. Because the range of the possible additional dollar cost will depend upon territory, bodily injury liability loss limits, and other factors, insurers shall be permitted to use round numbers to represent the approximate range of the cost increase. For example, if the smallest dollar rate increase was $ 54.00 and the largest $ 305.00, the insurer may use the range $ 50.00 to $ 310.00 on its Coverage Selection Form.

3. Premium Basis for Single Limit Liability Coverage:

i. For single limit liability coverage, the percentage range calculation that is described in (g)1 above shall be based upon the applicable liability rate. This calculation shall be made on the basis of a combined rate containing a charge for bodily injury liability, and property damage liability.

ii. For single limit liability coverage, the dollar range calculation that is described in (g)2 above shall be based upon the applicable liability rate. In contrast to the procedure in (g)3i above, the dollar change calculation shall be made on the basis of a complete rate containing a charge for bodily injury liability, personal injury protection (PIP), and property damage liability.

4. Insurers shall prepare:

i. An example showing the calculation of the high and low values for the percentage and dollar change ranges;

ii. Data about the insurer's territorial rates to confirm that the highest and lowest basic limit Limitation on Lawsuit Option rates have been used in the example. A rating page showing a list of Standard tier, basic limit rates by territory shall be sufficient;

iii. Data about the insurer's increased limits liability rating, vehicle usage, and type of driver factors to confirm that the proper relativities have been used in the example. The appropriate rating pages shall be sufficient; and

iv. For those insurers offering only single limit liability coverage, an explanation of the procedure used to develop the bodily injury liability rate from which the percentage and dollar change amounts have been determined. This explanation shall include an example of the calculation methodology.

N.J. Admin. Code § 11:3-15.6

As amended, R.1984 d.479, eff. 11/5/1984.
See: 16 N.J.R. 1693(a), 16 N.J.R. 3038(a).
(a)3: added "as amended by P.L. 1984 c.40".
New Rule, R.1989 d.117, effective 2/21/1989.
See: 20 N.J.R. 2984(a), 21 N.J.R. 558(b).
Repealed "Specific coverages and options to be included in written notice and buyer's guide".
Amended by R.1990 d.580, effective 11/19/1990 (operative January 1, 1990).
See: 22 N.J.R. 1681(a), 22 N.J.R. 3488(b).
Subsection (n) of this section is amended to delete in its entirety the text of the Buyer's Guide and to substitute new text therefor. The new text is written in plain language pursuant to the requirement of section 13 of the "Fair Automobile Insurance Reform Act of 1990" and incorporated several changes required to be made in the Coverage Selection Form by the Act; also amended to delete the provision that the Department, upon request from an insurer, will prepare a coverage-ready final page of the Buyer's Guide.
R.1992 d.218, effective 5/18/1992.
See: 24 N.J.R. 523(a), 24 N.J.R. 1898(b).
In (c), "Insurance companies. . . shall delete those sections" was "may delete . . .". Added new (n), regarding additional medical benefits, and redesignated existing (n) as ( o), with extensive revisions to Buyer's Guide. Redesignated existing ( o) through (r) as (p) through (s).
Amended by R.1996 d.58, effective 2/5/1996.
See: 27 N.J.R. 3682(a), 28 N.J.R. 855(a).
In (e) provided for supplies of the current Buyer's Guide, in (g) deleted "by glue or staples" following "bound", and in ( o) rewrote the Buyer's Guide.
Repeal and New Rule, R.1998 d.595, effective 12/21/1998 (operative March 22, 1999).
See: 30 N.J.R. 3577(a), 30 N.J.R. 4452(a).
Section was "Minimum Standards for New Jersey Auto Insurance Buyer's Guide".
Amended by R.2004 d.117, effective 3/15/2004.
See: 35 N.J.R. 3523(a), 36 N.J.R. 1420(a).
Substituted "Appendix, Exhibits 1 and 2" for "Appendix, Exhibits 1, and 3 in (a) and (d)1; in (f), substituted "Appendix, Exhibit 1" for Appendix, Exhibit 2" and "filed with the Department in accordance with N.J.A.C. 11:3-15.4(d) for "printed and used".
Amended by R.2011 d.166, effective 6/6/2011.
See: 42 N.J.R. 1981(a), 43 N.J.R. 1350(a).
In (a) and (d)1, substituted "3" for "2".