You can never be denied auto insurance based on your gender, race, or ethnicity. In most

circumstances, a company cannot refuse to sell you insurance based on where you live as long as

you are an “eligible”* person.

If you are denied auto insurance coverage, the agent or company must state a reason. Common

reasons include:

policies.

You can shop for cheaper auto insurance at any time – not just when your policy is up for

renewal. If you find a better price, you can cancel your old policy and seek a refund of your

unused premium. However, never cancel your old policy until a new one is in effect. A lapse in

coverage will result in higher rates in the future.

You have the right to change your coverages and policy limits at any time, even if you are not

near your renewal date. If you select lower policy limits or cancel nonmandatory coverages to

save money, you have a right to a refund of your unused premium within 60 days.

Starting in mid-2004, agents, brokers and companies must give you three coverage choices,

called “Insurance Scenarios,” when applying for a new policy, or at any time upon your request

if you are already insured. You must be told how each choice may affect what you pay and what

your benefits would be in the event of an accident. You always have the right to ask about

additional options.

You have the right to a timely response when seeking an appointment or application from an

agent, broker or company. Appointments should be scheduled so that you can obtain coverage

before your current policy expires. Please note that under current insurance regulations a

voluntary insurance company has five (5) business days from the date it receives a completed

application to either issue or deny coverage to the applicant. However, an application is not

considered complete until the company has obtained all pertinent information, including a copy

previous coverage. Therefore, the overall application process can take up to two weeks. Make

sure you give yourself enough time to shop for coverage.

You have the right to ask about any payments made to others by your company and charged to

your policy. If you file a claim, it should be handled promptly and fairly. If a claim is denied,

you must receive a written explanation for the denial.

There are specific circumstances that allow an insurance company to cancel your policy during

the policy period. This is referred to as a “mid-term cancellation.” This may only occur when

fraud is discovered, when your driver’s license is suspended or when the policyholder fails to

make premium payments. A 15-day warning notice must be sent before the policy is canceled.

If your coverage is canceled, you can file an appeal with the New Jersey Department of Banking

and Insurance. Contact Consumer Protection Services, P.O. Box 329, Trenton, NJ 08625-0329,

or call (609) 292-5316 or 1-800-446-SHOP. The Department cannot guarantee that your policy

will be reinstated, so you should not delay shopping for alternate coverage.

If a carrier denies you coverage and does not state a reason, or if you believe you have been

treated unfairly, you can contact Consumer Protection Services.

Insurers can decline to renew coverage for several reasons. Most often, this occurs when a

driver’s record includes “at-fault accident” or motor vehicle violations and is no longer

considered an “eligible”* person in the voluntary market. Other reasons include:

non-renew one vehicle for every two new ones it writes in each territory. The 2 percent rule

allows the insurer to non-renew up to 2 percent of policies in a territory experiencing heavy

growth. Drivers subject to non-renewal do not have clean driving records or have a poor

payment history. Insurers must state that they have invoked these rules on the non-renewal

notice.

A written non-renewal notice must be sent at least 60 calendar days prior to the expiration date

of the existing policy.

New Jersey state law requires that any registered vehicle be covered by an insurance policy.

Failure to maintain coverage can lead to higher prices for new policies, placement in the

“assigned risk” pool, suspension or revocation of your driver’s license or registration and

additional fines and penalties.

Maintaining your auto insurance coverage requires that you:

who incurs a lapse will end up paying far more for coverage.

seek information about all licensed drivers in the household.

be prepared in advance to become effective on a date several days or weeks after the

application.

A driver who mails a renewal payment before the due date cannot lose coverage. However,

insurers can charge the driver a late fee if the payment is postmarked on time, but arrives after

the payment due date.

household

or territory of producer’s office where applicable)

work 10 or more miles; 20,000 annual miles

work less than three miles; 12,000 annual miles

(front only) on Car #1

Property Damage Liability $25,000 (or combined single limit of $300,000)

household that includes a husband and wife with a 19-year-old daughter. They own a late-model

vehicle that is financed and an older vehicle that is paid off. The policy provides commonly

selected coverages and includes commonly selected deductibles, like those most New Jersey

drivers choose. The policy also has the No Limitation on Lawsuit option.

The annual premium for a policy like this, based upon the policyholder household described

Based on the above, choosing the following coverage options would affect the premiums in the

approximate amounts indicated below:

A. The policyholders do not have many assets they need to

protect and wish to save money, but would like to retain the

right to sue. Instead of the commonly selected liability limits

of $100,000/$300,000 and $25,000, they choose a policy with

the following minimum limits: Bodily Injury Liability limits of

$15,000/$30,000; Property Damage Liability of $5,000 (or

combined single limit of $35,000) and Uninsured Motorist

Coverage in these amounts. Choosing these limits will result in

B. Choosing the coverage limits in A. and the Limited

Alternate Bodily Injury

Liability Coverage.

(The premium for the

Bodily Injury portion of

the policy in the

example above is

about $_______).

3

A. The policyholders have health insurance through work

and stable employment. Choosing to have their health insurance

as the primary source of coverage for medical expenses, instead

B. Choosing to have PIP (medical expense) coverage of

$75,000 instead of the commonly selected $250,000 and a PIP

C. Choosing the coverage limit and deductible in B. and the

“Medical Expense Only” option, (which excludes income

continuation benefits, essential services benefits, death benefits,

and funeral expense benefits) will result in a reduction of about

* Check with your health plan. Not all plans offer this option.

A. Excluding all physical damage coverage on the older

B. Use of a $1,000 deductible for physical damage on the

C. If the 19-year-old daughter does not ever drive the latemodel

vehicle, use of the “Named Driver Exclusion” for the

daughter on the late-model vehicle will result in a reduction of

D. Choosing to exclude the older vehicle from all physical

damage coverage and to apply the higher $1,000 deductible on

Commonly selected

Coverages and

Deductibles with

Alternate Medical

Expense (Personal

Injury Protection or

“PIP”) coverage.

(The premium for the

PIP portion of the

policy in the example

above is about

$______.)

Commonly selected

Bodily Injury Liability

and Medical

Expense Coverages,

but the Policyholder

wishes to save

money on coverage

for damage to their

vehicles.

(The premium for the

Physical Damage

portion of the policy

in the example above

is about $_____.)

4

After considering their options, the policyholders decide that they want to retain an unlimited

right to sue, but choose other options to reduce their auto insurance costs. Using options 1A, 2A,

$ below the cost of the commonly selected coverage levels and deductible amounts.

11:3-10.1 Scope

This subchapter applies to claims arising under motor vehicle collision and comprehensive coverages.

11:3-10.2 Definitions

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly

indicates otherwise:

"Actual cash value", unless otherwise specifically defined by law or policy, means the lesser of the amounts for which the

insured or the designated representative can reasonably be expected to:

1. Repair the motor vehicle to its condition immediately prior to the loss; or

2. Replace the motor vehicle with a substantially similar vehicle. The amount shall include all moneys paid or payable as

sales taxes on the motor vehicle repaired or replaced. This paragraph shall not be construed to prevent an insurer from

issuing a policy where the amount of damages to be paid in the event of a total loss is a specified dollar amount.

"Agreed price" or "figure" means the amount agreed to by the insurer and the insured, or their representatives, as the

reasonable cost to replace the motor vehicle or to repair damages to the motor vehicle resulting from the loss, without

considering any deductible or deductions.

"Designated representative" means a person designated by the insured to represent the insured in negotiations with the

insurer in an attempt to settle the claim. The designated representative may be any person authorized by the insured who may

act legally in his or her behalf.

"Motor vehicle" shall have the meaning ascribed in N.J.S.A. 39:1-1.

"Substantially similar vehicle" means a vehicle of the same make, model, year and condition, including all major options of

the insured vehicle. Mileage must not exceed that of the insured vehicle by more than 4,000 miles. Mileage differences of

more than 4,000 miles may, at the option of the insured, be exchanged for the presence or absence of options or a cash

adjustment.

11:3-10.3 Adjustment of partial losses

(a) If the insurer intends to exercise its right to inspect, or cause to be inspected by an independent appraiser, damages prior

to repair, the insurer shall have seven working days following receipt of notice of loss to inspect the insured's damaged

vehicle, which is available for inspection, at a place and time reasonably convenient to the insured; commence negotiations;

and make a good faith offer of settlement.

(b) Negotiations must be conducted in good faith, with the basic goal of promptly arriving at an agreed price. Early in

negotiations, the insurer must inform and confirm in writing to the insured or the insured's designated representative all

deductions that will be made from the agreed price, including the amount of applicable deductible.

(c) If the insurer inspects the damaged vehicle or causes it to be inspected, the insurer shall promptly upon completing the

inspection furnish the insured or the designated representative of the insured with a detailed written estimate of the cost of

repairing the damage resulting from the loss, specifying all appropriate deductions.

(d) No insurer shall negotiate the settlement of any physical damage claim involving an automobile as defined at N.J.S.A.

39:13-1b with an unlicensed auto body repair facility or in any manner utilize an unlicensed facility in the adjustment,

negotiation or settlement of such a claim. It shall be the responsibility of the insurer to make a reasonable and diligent effort

to determine whether the facility is properly licensed.

(e) Subject to the requirements of (d) above, the insured may use any repair facility of his or her own choice. With respect to

automobile damage claims, the insurer shall notify in writing any insured who elects to use his or her own repair facility that,

pursuant to law, any entity engaged in the business of auto body repairs must be duly licensed. The notice shall further

advise the insured that the insurer is prohibited by law from negotiating, adjusting or settling an automobile damage claim

with an unlicensed facility. The written notice shall be furnished at the time of acknowledgment of the claim as provided at

N.J.A.C. 11:2-17.6 or upon the furnishing of its written estimate, as specified at (c) above, whichever is sooner. The insurer

must make all reasonable efforts to obtain an agreed price with the facility selected by the insured. The insurer may

recommend, and if the insured requests, must recommend a qualified repair facility at a location reasonably convenient to the

insured motor vehicle who will repair the damaged motor vehicle at the insurer's estimated cost of repairs, but in either event

the provisions of (g) below apply.

(f) All estimates, including revisions and adjustments, prepared by any repair facility, estimator or appraiser must be

included in each claim file.

(g) If the insured's vehicle is repaired at a repair facility whose name is furnished by the insurer under (e) above for a sum

estimated by the insurer as the reasonable cost to repair the vehicle, the insurer:

1. Shall select a repair facility that issues written guarantees that any work performed in repairing damaged vehicles meets

generally accepted standards for safe and proper repairs;

2. Shall cause the damaged vehicle to be restored to the condition it was in prior to the loss, at no additional cost to the

insured and within a reasonable time, if the repair facility does not repair the damaged vehicle in accordance with generally

accepted standards for a safe and proper repair.

(h) Whenever an insurer elects to repair its insured's vehicle, that is, physically take the vehicle and have it repaired, the

election must be in writing addressed to the insured and contain a reasonable estimate of the time period within which the

vehicle will be repaired. The insurer shall guarantee, in writing, that the work performed meets generally accepted standards

for safe and proper repairs.

(i) Deductions for betterment and depreciation are permitted only for parts normally subject to repair and replacement during

the useful life of the insured motor vehicle. Deductions for betterment and depreciation shall be limited to the lesser of an

amount equal to the proportion that the expired life of the part to be repaired or replaced bears to the normal useful life of that

part, or the amount by which the resale value of the vehicle is increased by the repair or replacement. Calculations for

betterment, depreciation and normal useful life must be included in the insurer's claim file.

(j) Deductions for previous damage or prior condition of the vehicle must be measurable, discernible, itemized and specific

as to the dollar amount, and those deductions must be included in the insurer's claim file. The deductions shall be limited to

the amount by which the resale value of the motor vehicle is increased by the estimation of the previous damage or the

correction of the prior condition.

(k) The insurer must mail or hand deliver to the insured or the designated representative its proof of loss or payment within

five working days after the insured has accepted the insurer's offer.

(l) The insured shall have the right to receive the proceeds of any settlement. The insurer may not insist on making

settlement proceeds jointly payable to the insured and the repair facility, or payable to the repair facility only.

(m) The insured may elect to have the insurer pay the repair facility directly in order to expedite recovery of the motor

vehicle. The insured must make this election in writing.

11:3-10.4 Adjustment of total losses

(a) If the insurer elects to make a cash settlement, it must bear in mind at all times that the insured's position is that of a

retail consumer and the settlement value arrived at must be reasonable and fair for a person in that position. Written,

itemized valuations showing all options and deductions shall be included in the insurer's claim file and presented to the

insured no later than the date of payment. If the insurer elects to make a cash settlement, its offer, subject to applicable

additions or deductions, must be one of the following plus applicable sales tax:

1. The average of the retail values for substantially similar motor vehicles as listed in the editions current for the date of loss

of two valuation manuals approved by the Commissioner.

i. The average figure arrived at may be reduced or increased by considering all factors, including, but not limited to,

mileage tables and the presence or absence of extras.

ii. If the destroyed vehicle included an option which is listed in one manual but not in the other, the value of the option shall

not be averaged. The insured shall receive full value for the option by carrying over the amount listed to the other manual.

The option carryover shall apply only in those instances where the option has not been considered by the used vehicle guide

either as a separate item or included in the vehicle's base value.

iii. If a manual is submitted for approval by the Commissioner its accuracy must meet objective criteria for the values of

substantially similar vehicles of at least 85 percent of all makes and models for the last 15 years and shall include all major

options. A sufficient number of vehicles shall be used for each year, make and model to represent a cross-section sufficient

to determine fair market values. At the time of request for approval, the source of the manual's data must be revealed to the

Commissioner in a manner that can be verified by the Department. Manuals approved for use on or after January 1, 1976 are

"Automobile Red Book" and "Older Car/Truck Red Book" published by Maclean Hunter Market Reports, Inc. and the

"N.A.D.A. Official Used Car Guide" and "N.A.D.A. Official Older Car Guide" published by the National Automobile

Dealers Used Car Guide Company.

2. A quotation obtained by the insurer for a substantially similar motor vehicle from a dealer located within a reasonable

distance from the principal place of garagement of the insured vehicle. Unless otherwise agreed by the insured, a reasonable

distance shall not exceed 25 miles from the principal place of garagement. The vehicle must be available for purchase by the

insured and the insured must be able to purchase it for the insurer's cash offer plus applicable deductions. The insurer shall

maintain in its claim file proof of the vehicle's availability and the name and location of the dealer, stock number, vehicle

identification number and description of the substantially similar vehicle.

3. The fair market value of the insured vehicle, determined by using a source including a computerized database approved

by the Commissioner that meets all of the following minimum criteria:

i. The source must give primary consideration to the values of vehicles in the local market area, but if necessary to obtain a

reasonable cross-section of the market, may consider vehicles in the next closest area.

ii. The source shall produce fair market values of substantially similar vehicles for at least 85 percent of all makes and

models for the last 15 years and shall include all major options. A sufficient number of vehicles must be used for each year,

make, and model to represent a cross-section of the market sufficient to determine fair market value.

iii. If the database uses several price ranges for the same model vehicle depending on the condition of the vehicle, it must

clearly indicate what condition the vehicle is being valued at and define in detail the difference between such rating

categories. Documentation of the condition of the insured vehicle must be made a part of the written valuation.

iv. At the time of request for approval the source of the database shall be revealed to the Commissioner in a manner that can

be verified by the Department.

4. If it is not possible to value the insured vehicle by using the method set forth in (a)1, 2 and 3, the insurer shall determine

the retail value of the vehicle by using the best available method and shall fully explain in writing to the insured how its offer

was calculated.

(b) If the insurer is notified in writing within 30 calendar days of the receipt of the claim draft that the insured cannot

purchase a comparable vehicle at the market value established by the insurer, the insurer shall reopen its claim file and the

following procedures will apply:

1. The insurer may locate a substantially similar vehicle by the same manufacturer of the same year, make and model, with

similar options, mileage, and condition as the destroyed vehicle from a licensed dealer. Such vehicle must be within a

reasonable distance not to exceed 25 miles from the insured's principal place of garaging;

2. The insurer shall either pay the difference between the market value before applicable deductions and the cost or the

market value as determined by (a)2 above of a substantially similar vehicle located by the insured or negotiate and effect

purchase of this vehicle for the insured;

3. The insurer may elect to offer a replacement vehicle in accordance with the provisions as in (e) below; or

4. The insurer or insured may conclude the loss settlement as provided for under the appraisal section of the insurance

contract in force at the time of loss. This appraisal shall be considered as binding against both parties, but shall not preclude

or waive any other rights either party has under the insurance contract or under law.

(c) The insurer shall advise the insured in writing of the rights of recourse at the time the settlement draft is issued and retain

a copy of the notice in its claim file.

(d) An insurer shall use the same source of settlement for all claims unless it is documented that the primary settlement

source is not available in the case of a particular vehicle. At the request of the Commissioner, the insurer shall provide the

Department with its primary source of valuation for vehicles.

(e) If the insurer elects to replace the vehicle, the replacement vehicle must be an immediately available, substantially similar

vehicle that is both furnished and paid for by the insurer, subject to the deductible, if any, and including applicable sales tax.

(f) If the insured vehicle is a private passenger automobile of the current model year, meaning that the vehicle has not been

superseded in the market place by an officially introduced succeeding model, the insurer shall utilize one of the following

methods in the settlement of the loss, unless the utilization of (a) or (b) above is more favorable to the consumer.

1. Either the insurer shall pay the insured an amount equal to the reasonable purchase price on the date of the loss of a new

identical vehicle, less any applicable deductible and an allowance for depreciation in accordance with the schedule below;

or

2. The insurer shall provide the insured with a new identical replacement vehicle charging the insured for any applicable

deductible and for depreciation in accordance with the schedule below:

Depreciation Schedule

Purchase Price Depreciation per mile

Up to $ 6,500 $0.10

$ 6,501-$ 8,000 0.12

8,001- 10,000 015

10,001- 12,000 0.18

12,001- 15,000 0.21

15,001- 20,000 0.25

More than $20,000 0.29

(g) In the event of a total loss, any parts of the insured vehicle included in its valuation which are removed by the insured or

the designated representative shall have their value deducted from the final settlement figure. This section shall not be

construed to grant a right of removal.

(h) The following provisions of N.J.A.C. 11:3-10.3 also shall apply to the adjustment of total losses, except that the insurer

shall have a total of 14 working days to comply with the requirements of subsections (a), (b), (c), (h), (i), (j) and (k) of

N.J.A.C. 11:3-10.3.

(i) This section does not prohibit an insurer from issuing a stated value policy insuring against physical damage where the

amount of damages to be paid in the event of a total loss is a specified dollar amount.

(j) If the vehicle is a total loss, the insurer may require that the insured transfer ownership of the vehicle to recoup salvage as

a condition of settlement.

11:3-10.5 Unreasonable delay

(a) Unless a clear justification exists, physical damage claims will have a maximum payment period of 30 calendar days. A

payment period is the period between the date of the receipt of the notice of loss by the insurer, and:

1. The date the settlement check is mailed; or

2. The date on which the damaged vehicle is returned to use when the insurer elects to repair or have repaired the insured

vehicle; or

3. The date on which the damaged vehicle is replaced by the insurer.

(b) If any element of a physical damage claim remains unresolved more than 30 calendar days from the date of receipt of

notice of loss by the insurer, the insurer shall provide the insured with a written explanation of the specific reasons for delay

in the claim settlement. An updated letter of explanation shall be sent again every 30 calendar days thereafter until all

elements of claim are either honored or rejected.

(c) Any letter of explanation, rejection or acceptance of any element of a claim shall contain in the upper right hand corner

the date of receipt of notice of loss by the insurer and be identified as such. The letter shall also contain the identity and

claim processing address of the insurer, and the insured's policy number and claim number.

11:3-10.6 Loss of use

In the event of the theft of the entire vehicle the insurer at the time of notification shall advise the insured of his or her right

under the policy to be reimbursed for transportation expenses. The notification must be confirmed in writing immediately

after receipt of notice of theft. All conditions and benefits related to this coverage as stated in the policy must be contained in

the notification to the insured.

11:3-10.7 Subrogation agreements

(a) If an insured has received payment under his or her physical damage coverage that is subject to a deductible, the insured

shall share, pro rata, with the insurer any net recovery received by the insurer from third parties.

(b) Net recovery shall be the total recovery less the insurer's allocated loss adjustment expenses attributable to such recovery.

The formula for computing net recovery and the insured's share of recovery of the deductible may be stated as follows:

1. Total recovery – Allocated loss adjustment expenses = Net recovery

2. Application of formula: Assume a loss of $500.00 subject to a $100.00 deductible with a $50.00 in allocated loss

adjustment expense:

i. If there is full recovery of $500.00; computation of net recovery: $500.00 - $50.00 = $450.00

ii. If there is a partial recovery of $300.00: computation of new recovery: $300.00 - $50.00 = $90.00

(c) Unless the insurer returns its insured's full deductible the insured shall attempt to effect full recovery in clear liability

cases and shall not enter into any intercompany agreements that provide for the acceptance of lesser amounts on a formula

basis.

(d) If an insurer has paid a physical damage claim that is subject to a deductible and it elects not to pursue its subrogation

claim where the probability of recovery exists, the insurer shall so notify its insured in writing within 60 calendar days after it

has paid the claim, except that the notification shall be given at least 30 days prior to the running of any applicable statute of

limitations or period required for notice of claim. If an insurer does not notify its insured within the time periods prescribed

above and the statute of limitations or period required for notice or claim has expired, the insurer shall forthwith remit to its

insured the full amount of the insured's deductible.

11:3-10.8 Repair estimates

If the insurer requires that its insured obtain more than one estimate of motor vehicle damage, the reasonable cost of such

additional estimates, if any, shall be borne by the insurer unless the estimator does the work.

11:3-10.9 Referral of insured to the at-fault party

There shall be no attempt to discourage an insured from filing a physical damage claim, nor shall an insurer encourage its

insured to assert a claim against a third party in lieu of filing a physical damage claim under the insured's policy.

11:3-10.10 Examinations by the New Jersey Department of Banking and Insurance

To ensure compliance with this rule, the Department of Banking and Insurance personnel will investigate the market

performance of insurers. To enable Department personnel to reconstruct an insurer's activities pursuant to the provisions of

this rule, each insurer must maintain a complete file on each claim settled pursuant to this rule. The claim file shall contain all

communications, transactions, notes and work papers relating to the claim. With respect to automobile damage claims, the

file also shall include the name, address, telephone number and license number of any auto body repair facility that has been

utilized by the insurer in the adjustment of the loss or repair of the automobile. All papers in the file must be accurately dated

by the insurer.

11:3-37.1 Purpose and scope

The purpose of this subchapter is to establish guidelines for the order of benefit determination between a

plan of health insurance and personal injury protection provided through an automobile policy pursuant to N.J.S.A.

39:6A-4, when a named insured elects to have his or her personal injury protection become secondary coverage for

the provision of benefits for medical expenses incurred due to injuries sustained in an automobile accident. This

subchapter also sets forth the requirements for the order of benefit determination between a plan of health insurance

and personal injury protection provided pursuant to N.J.S.A. 39:6A-4 or 39:6A-3.1, when personal injury protection

is primary coverage. The provisions of this subchapter shall apply to all automobile policies, as that term is defined

at N.J.S.A. 39:6A-2a, issued to New Jersey residents, or renewed on or after January 1, 1991, and to all health

benefits plans which have been or will be delivered or issued for delivery in this State.

11:3-37.2 Definitions

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context

clearly indicates otherwise.

"Actual benefits" means those benefits determined to be payable for allowable expenses.

"Allowable expense" means a medically necessary, reasonable and customary item of expense covered by an

insured's health benefits plan(s) or PIP plan as an eligible expense, at least in part. When a plan provides benefits in

the form of services, the reasonable monetary value of each such service shall be considered as both an allowable

expense and a paid benefit.

"Benefits" means the provision of the following in consideration of payment of premiums or fees on a prepaid or

postpaid basis:

1. Services, including supplies;

2. Payment of expenses incurred;

3. A combination of 1 and 2 above; or

4. An indemnification.

"Eligible expense" means:

1. In the case of health benefits plans, that portion of the medical expenses incurred for treatment of

an injury which is covered under the terms and conditions of the plan, without application of the deductible(s) and

copayment(s), if any.

2. In the case of PIP plans, that portion of the medical expenses incurred for treatment of an injury

which, without considering any deductible and copayment, shall not exceed:

i. The percent or dollar amounts specified on the medical fee schedules, or the actual billed

expense, whichever is less; or

ii. The reasonable amount, as determined by the automobile insurer, considering the medical

fee schedules for similar services or equipment in the region where the service or equipment was provided, when an

incurred medical expense is not included on the medical fee schedules.

"Health benefits provider" means any person, whether subject to the regulation of the New Jersey Department of

Banking and Insurance, Department of Health and Senior Services, or both, or not otherwise subject to such

regulation, who contracts to provide health services, provide reimbursement for the cost of health services in whole

or in part, or to provide for indemnity in the event health services are used, in return for a prepaid or postpaid

premium or fee or other consideration, including, but not limited to:

1. Insurers, as defined at N.J.S.A. 17B:17-2;

2. Hospital service corporations, as defined at N.J.S.A. 17:48-1;

3. Medical service corporations, as defined at N.J.S.A. 17:48A-1;

4. Health service corporations, as defined at N.J.S.A. 17:48E-1;

5. Health maintenance organizations, as defined at N.J.S.A. 26:2J-2;

6. Dental service corporations, as defined at N.J.S.A. 17:48C-2;

7. Dental plan organizations, as defined at N.J.S.A. 17:48D-2;

8. Medicare;

9. Medicaid;

10. State Employees Health Benefits Plan;

11. CHAMPUS;

12. Self-insured programs; and

13. An entity organized under the laws of any other state or jurisdiction which delivers certificates to

residents of New Jersey evidencing coverage under a contract issued and delivered in a state or jurisdiction other

than New Jersey.

"Hospital expenses," when used by the automobile insurance PIP plan, means those expenses defined at N.J.S.A.

39:6A-2f.

"Injury" means bodily injury sustained by an insured as a result of an accident while occupying, entering into,

alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or

from an automobile.

"Insured" means a person eligible for coverage, at least in part, for medical expenses incurred for treatment of

injuries, under an automobile policy PIP medical expense provision, and who meets the definition of a named

insured or family member.

1. Named insured means the person or persons identified as the insured in the automobile policy and

if an individual, that person's spouse, if the spouse is a resident of the same household, except that if the spouse

ceases to be a resident of the household of the named insured, coverage for that spouse shall continue until the

expiration of full term of any policy period in effect at the time of the cessation of residency.

2. Family member means any relative of the named insured or the named insured's spouse who:

i. Is related to the named insured or named insured's spouse by blood, marriage, adoption or

guardianship;

ii. Resides in the household of the named insured or spouse of the named insured; and

iii. Is not a named insured under another automobile policy.

"Medical expenses" is as defined in N.J.A.C. 11:3-4.2.

"Medical fee schedule" means that list of services, procedures and supplies to which have been assigned a

maximum fee or percentage of a fee payable by an automobile insurer for expenses incurred as a result of the

rendering to an insured any of those specific services, procedures or supplies for injuries, which list is set forth at

N.J.A.C. 11:3-29.

"Out-of-State automobile insurance coverage" or "OSAIC" means any coverage for medical expenses under an

automobile insurance policy other than PIP, as PIP is defined herein, including automobile insurance policies issued

in another state or jurisdiction.

"PIP" means personal injury protection coverage provided as part of an automobile insurance policy pursuant to

N.J.S.A. 39:6A-4 or 39:6A-3.1, issued in New Jersey, specifically those provisions for medical expenses coverage.

"Plan" means any policy, contract, certificate, booklet, evidence of enrollment, program, or other such term which

evidences the existence of a relationship between a health benefits provider or PIP carrier and an insured with

respect to the provisions of hospital, medical, surgical, dental and/or other health care related benefits, at least in

part.

"Primary coverage" means coverage by any plan which determines its actual benefits payable on allowable

expenses incurred by an insured for treatment of injuries without taking into consideration the existence of any

coverage for which the insured may be eligible provided secondary in accordance with this subchapter. There may

be more than one plan providing the insured primary coverage.

"Secondary coverage" means coverage by any plan which determines its actual benefits payable on all allowable

expenses incurred by an insured for treatment of injuries after all plans providing primary coverage have considered

expenses incurred and paid actual benefits.

11:3-37.3 Health benefits providers

(a) Nothing in this subchapter shall be construed as requiring any health benefits provider to offer, provide, or

continue coverage to or for any individual or group, except as may be set forth by other laws of this State, or of the

Federal government.

(b) Nothing in this subchapter shall be construed as requiring any health benefits provider to provide coverage for

any treatment or service not otherwise covered under the terms of the applicable health benefits plan.

(c) No health benefits contract or policy delivered or issued for delivery in this State, or renewed, continued or

converted on or after January 1, 1991, shall contain any provision, rider, waiver of endorsement or other instrument

which restricts, limits or excludes coverage, directly or indirectly, of services or expenses otherwise eligible under

the policy or contract on the grounds that such expenses or services would be covered under an automobile policy

PIP provision for which the insured would be eligible had the named insured on the automobile policy not selected

the PIP-as-secondary coverage option.

(d) No health benefits contract or policy delivered or issued for delivery in this State, or renewed, continued or

converted on or after January 1, 1991, shall contain any provision, rider, waiver or endorsement, or other instrument

which restricts, limits or excludes coverage, directly or indirectly, of services or expenses otherwise eligible under

the policy or contract on the grounds that:

1. Such expenses arise from an automobile-related injury;

2. Such expenses are covered or paid by PIP; or

3. Such expenses are covered or paid by OSAIC except for reductions in benefits when the health benefits

contract provides secondary coverage as defined in and permitted by this rule.

(e) A health benefits contract or policy may provide that it is always primary to OSAIC, or may provide that it will

determine its benefits as if it were secondary to any OSAIC. If the health benefits contract or policy provides that it

will determine its benefits as if it were secondary to OSAIC and the OSAIC either contains a provision that it is

always excess or secondary, or refuses to cooperate in determining the amount of benefits payable by the health

benefits plan as secondary coverage provider, the health benefits plan shall provide primary coverage.

11:3-37.4 Application of the PIP-as-secondary coverage option

(a) When a named insured elects the PIP option, whereby the named insured intends that medical expenses incurred

for treatment of an injury are to be covered by a health benefits provider or providers, as evidenced on the Coverage

Selection Form, then the medical expense provisions of the PIP coverage shall be considered to be secondary

coverage for the purposes of the order of benefit determination, and all health benefits plans of an insured subject to

the PIP option elected shall be considered to be primary coverage.

(b) The election by the named insured to make PIP medical expense provisions secondary coverage shall apply to

only the named insured and family members of the named insured who reside in the named insured's household and

are not named insureds under other automobile policies.

(c) The election by the named insured to make PIP medical expense provisions secondary coverage shall continue

in force as to subsequent renewal or replacement policies until the automobile policy insurer or its authorized

representative receives a properly executed written request revoking the selection of this option.

(d) In the event that an insured is ineligible for health plan coverage of medical expenses, or is eligible for coverage

under a dental expense or dental service plan only when an injury occurs, despite the selection of the PIP-assecondary

coverage option by the named insured, benefits shall be provided to the insured through PIP coverage in

accordance with N.J.A.C. 11:3-37.8.

11:3-37.5 Health benefit plan standards and the PIP premium reduction

(a) An automobile insurer may eliminate the premium reduction on the base rate applicable to the amount of

medical expense benefit chosen in conjunction with the PIP-as-secondary coverage option election if the automobile

insurer complies with (b) below, and verifies that the coverage specified by the named insured:

1. Excludes the provision of benefits for treatment of injuries of an eligible insured when expenses incurred

in relation to treatment of those injuries are eligible expenses under an automobile policy's PIP provisions; or

2. Provides that it is always secondary, or otherwise will not be a primary provider of benefits;

3. Provides benefits only for dental expenses or dental services; or

4. Provides benefits only for prescription drugs.

(b) An automobile carrier shall notify a named insured if the automobile insurer determines that the health benefits

plan(s) specified by the named insured contain exclusionary or restrictive coverage provisions as set forth in (a)

above, or if the automobile insurer determines that one or more of the insureds covered under the automobile

insurance policy is not provided coverage by at least one of the health benefit plan(s) specified by the named

insured, and, therefore, the named insured's premium reduction for PIP medical expense benefits will be eliminated.

1. The notice shall be in writing and shall specify the reasons why the automobile insurer believes the named

insured's health plan coverage is not in compliance with this subchapter.

2. The automobile insurer may include in the notice a demand for payment of the premium reduction difference

with an explanation that failure to pay the indicated premium reduction difference may result in early cancellation of

the automobile policy in accordance with (c) below.

3. The notice shall be sent no later than 30 days prior to the date of cancellation as calculated in accordance with

(c) below. A notice which is sent 30 days prior to the date of cancellation shall either contain a statement that it is a

notice of cancellation, or be attached to a notice of cancellation, setting forth the effective date of cancellation.

(c) The effective date of the cancellation of a policy for nonpayment of premium shall not be earlier than 10 days

prior to the last full day of which premium received by the company, prior to the date of preparation of the

cancellation notice, would pay for coverage on a pro rata basis. In calculating the effective date of the cancellation,

the premium applicable to the coverage provided by the policy and the premium received by the company at or prior

to the time the cancellation notice was prepared shall be the premium used for the calculation and determination of

such effective date.

1. No cancellation in accordance with (c) above shall be effective unless prior thereto, the automobile

insurer shall have notified the named insured that the premium reduction difference had to be paid to avoid

cancellation, as specified in (b)2 above.

2. No cancellation notice shall be mailed prior to 30 days in advance of its effective date.

(d) If the insured provides payment of the full premium amount and subsequently provides proof that coverage is

not restricted in the manner set forth in accordance with (a) above, or that all insureds under the automobile policy

were provided coverage by a health benefits plan at the time notification of noncoverage was sent, and that such

coverage continues and is not restricted in the manner set forth in accordance with (a) above, the automobile insurer

shall refund the monies paid in excess of the full reduction, or shall credit any excess paid on the reduced premium

to the extent any premium payment is still unpaid on the policy.

11:3-37.6 Order of benefits determination when PIP is secondary coverage

(a) When the named insured of an automobile policy has selected the PIP-as- secondary coverage option, all health

benefits plans for which the insured is eligible shall provide coverage for the allowable expenses incurred by the

insured due to an automobile-related injury prior to any benefits for medical expenses being paid by a PIP plan.

(b) If the insured is eligible for coverage under more than one group health benefits plan, the group health benefits

plans shall coordinate benefits with one another in accordance with the rules set forth for such plans at N.J.A.C.

11:4-28.

(c) The PIP plan shall provide benefits for allowable expenses remaining uncovered after all health benefits plans

for which the insured is eligible have paid benefits towards those allowable expenses.

(d) The PIP plan shall continue to be liable for expenses related to the same occurrence as the expenses are

incurred, whether or not the health benefits plan(s) in force at the time of the accident terminate(s) coverage, or

benefits provided under the health benefits plan(s) are exhausted subsequent to the occurrence of the accident, up to

the maximum PIP benefits available to the insured under the terms of the automobile policy.

(e) Total benefits paid by an insured's health benefits and PIP plans shall not exceed the amount of total allowable

expenses.

11:3-37.7 Determination of PIP medical benefits payable when PIP is secondary coverage

(a) In calculating the actual benefits to be paid by the automobile insurer when the PIP-as-secondary coverage

option has been selected, the automobile insurer shall first determine the amount of eligible expenses which would

have been paid after application of the deductible and copayment limitations had the PIP-as-secondary coverage

option not been selected.

1. In the event the remaining allowable expenses are less than the benefits calculated pursuant to (a) above,

the automobile insurer shall pay actual benefits equal to the remaining allowable expenses, without reducing the

remaining allowable expenses by its deductible or copayments.

2. In the event the remaining allowable expenses are greater than the benefits calculated pursuant to (a)

above, the actual benefits paid by the automobile insurer shall be the benefits calculated pursuant to (a) above,

without reducing the remaining allowable expenses by its deductible or copayments.

(b) In paying actual benefits, the automobile insurer shall not:

1. Reduce its actual benefits payable on account of any deductibles or copayments of the health benefits

plans which have provided benefits ahead of the PIP plan due to the selection of the PIP-as-secondary coverage

option; or

2. Reduce its actual benefits payable for any allowable expense remaining uncovered which item of

expense otherwise would not be an eligible expense under the PIP plan, except as set forth by (c) below.

(c) In determining remaining uncovered allowable expenses, the automobile insurer shall not consider any amount

for items of expense which exceed the dollar or percent amounts recognized by the medical fee schedules

promulgated pursuant to N.J.S.A. 39:6A-4.6.

(d) The total amount of benefits to be provided through the PIP medical expense provisions for each insured per

accident or occurrence shall not exceed the maximum PIP benefits as provided for by the terms of the policy.

11:3-37.8 Health benefits plan coverage ineligibility

(a) When, subsequent to the selection of the PIP-as-secondary coverage option by a named insured, it is determined

that an insured did not have health coverage in effect at the time of an injury, or had health coverage in effect at the

time of any injury which is such that the PIP-as-secondary coverage option selection could have been invalidated by

the automobile insurer and elimination of the premium reduction amount effected in accordance with N.J.A.C. 11:3-

37.5(a), but was not, then the insured shall be provided benefits for incurred medical expenses through the PIP

medical expense provision.

1. Benefits payable shall be subject to a per accident deductible equalling the total of $750.00 plus the PIP

deductible selected by the named insured of the policy.

2. Benefits payable shall be subject to a 20 percent copayment for amounts less than $5,000 after the

deductible has been satisfied.

3. Determination of the amount of benefits payable shall be made in accordance with medical fee schedules

promulgated pursuant to N.J.S.A. 39:6A-4.6 and set forth at N.J.A.C. 11:3-29, or on a reasonable basis, as

determined by the automobile insurer, considering the medical fee schedules for similar services or equipment in the

region where the service or equipment was provided, when an item of expense is not included on the medical fee

schedules.

4. Total benefits paid for each insured eligible for benefits in any one accident shall not exceed the

maximum PIP benefits provided for by the terms of the policy.

(b) All items of medical expense incurred by the insured for treatment of an injury shall be eligible expense to the

extent the treatment or procedure from which the expenses arose is recognized on the medical fee schedules, or are

reasonable medical expenses in accordance with N.J.S.A. 39:6A-4.

(c) The automobile insurer shall be entitled to recover, for the contract period in which the automobile-related

injury occurred, the difference between the reduced premiums paid on the policy and the amount of premium which

would have been due on the policy had the named insured not selected the PIP-as- secondary coverage option, and

no premium reduction shall be provided on that policy for the PIP-as-secondary coverage option during the

remainder of that current contract period.

11:3-37.9 Determination of benefits when PIP is primary coverage

(a) When no election has been made by a named insured to make his or her health benefits plan(s) primary coverage

provider(s), so that the PIP plan will provide primary coverage for medical expenses incurred for treatment of

injuries, the PIP plan shall provide benefits to the insured without consideration of any benefits for which the

insured may be eligible under any health benefits plan.

(b) Actual benefits paid by the PIP plan shall be medical expenses, subject to the policy limits and the application of

any deductible and copayment provided for by the terms of the automobile policy, approved by the Commissioner

pursuant to N.J.S.A. 39:6A-4 or 39:6A-3.1, and any rules promulgated thereunder.

(c) Actual benefits payable by a health benefits plan, when the PIP plan is providing primary coverage for medical

expenses incurred for treatment of injuries, shall be the lesser of the remaining uncovered allowable expenses or the

actual benefits that would have been payable had the health benefits plan been providing coverage primary to the

PIP plan.

1. Actual benefits payable may be reduced by the deductible(s) and copayment requirements applicable by

the terms of the health benefits plan, and shall not exceed the amount of actual benefits that would have been

payable had the health benefits plan been providing coverage primary to the PIP plan.

2. Allowable expenses remaining uncovered, which the health benefits plan(s) shall consider when the PIP

plan is providing primary coverage, include:

i. Any PIP deductible(s);

ii. Any PIP copayment amounts;

iii. Any expenses which exceed the medical expense coverage limits of the PIP plan per person per

accident, as set forth by the terms of the automobile policy; and

iv. Any expenses not covered by the PIP plan when such expense was determined to be in excess

of the reasonable charge for an item of expense not listed on the medical fee schedules, but for which the automobile

insurer determined a reasonable charge based on the medical fee schedule for a similar item of expense in the region

where the service or equipment was provided.

(d) When a health benefits plan provides hospital expense or service benefits only, or medical expense or service

benefits only, and is not otherwise a part of a basic health benefits package, all allowable expenses remaining

uncovered shall be considered by that health benefits plan for the provision of benefits, without regard as to whether

the expenses are hospital-related or medical- related expenses. Actual benefits paid by that health benefits plan for

the allowable expenses remaining uncovered shall not exceed the total actual benefits which would have been

payable had the health benefits plan been providing coverage primary to the PIP plan.

(e) When there is one health benefits plan providing insureds hospital expense or service benefits and another health

benefits plan providing insureds medical expense or service benefits as two separate parts of one basic health

benefits plan package, the hospital benefits plan and the medical benefits plan shall both consider all allowable

expenses remaining uncovered and shall apportion such allowable expenses between the two plans on a pro-rata

basis without regard as to whether the expenses are hospital-related or medical-related expenses. Actual benefits

paid by each plan of the health benefits plan package shall not exceed the total actual benefits which would have

been payable by each plan had the health benefits plan package been providing primary coverage.

(f) No insured shall be liable to a health care provider for any fees for services or supplies which exceed the dollar

or percentage amounts recognized for those services or supplies on the medical fee schedules.

(g) No health benefits plan shall seek repayment from or withhold payment to an insured for amounts paid to the

insured in consideration of charges which were in excess of the amounts set forth in the medical fee schedules.

(h) If there is more than one group health benefits plan providing secondary coverage to an insured, these plans may

coordinate their benefits with one another in accordance with N.J.A.C. 11:4-28.

11:3-37.10 Explanation of benefits

(a) Automobile insurers shall develop and utilize an explanation of benefits form to be provided with the payment

of benefits for expenses incurred for treatment of injuries which clearly identifies and explains the following:

1. Each procedure for which a claim has been made;

2. Eligible expense related to each procedure with an indication of whether the eligible expense is based on

the medical fee schedules or is the reasonable charge as determined by the automobile insurer;

3. Actual benefits paid;

4. Any deductible or copayment applied;

5. A concise explanation why any item of expense is considered an ineligible expense, when this occurs;

and

6. A statement to insureds that no health care provider may demand or request any payment from any

person in excess of those permitted by N.J.A.C. 11:3- 29, and that no person is liable to any health care provider for

any amount of money which results from the charging of fees in excess of those permitted by N.J.A.C. 11:3-29

pursuant to N.J.S.A. 39:6A-4.6.

11:3-37.11 Dispute as to primacy of coverage

(a) If, subsequent to the selection of the PIP-as-secondary coverage option by the named insured, injuries are

sustained by an insured eligible for health benefits plan coverage, but a dispute exists between the health benefits

provider and the automobile insurer, then the health benefits provider shall provide benefit as if it were the primary

coverage provider and no PIP benefits were available to the insured. In no event shall the provision of benefits be

unreasonably delayed by either a health benefits provider or an automobile insurer.

(b) If the health benefits provider asserts that it is not subject to N.J.A.C. 11:3-37.3, and thus, will not act as the

primary coverage provider then the automobile insurer shall assume the role of primary coverage provider, and

provide its benefits in accordance with N.J.A.C. 11:3-37.8. The automobile insurer shall be entitled to recover

premium reductions in accordance with N.J.A.C. 11:3-37.8(c).

11:3-37.12 Eligibility under two or more automobile policies

(a) If an insured is eligible for coverage of medical expenses under more than one automobile policy, the

determination as to which automobile policy will assume coverage responsibility for that insured shall be as follows:

1. A named insured shall receive benefits for medical expenses under the terms of the automobile policy on

which he or she, or his or her spouse, is identified as the named insured.

2. A family member who is a child of a named insured or the named insured's spouse shall receive benefits

for medical expenses under the automobile policy of the named insured, subject to the following:

i. If the child is a child of more than one named insured or of more than one spouse of a named

insured, the child shall receive benefits under the terms of the automobile policy of the named insured who has legal

custody of that child or whose spouse has legal custody of that child.

ii. If the child is a child of more than one named insured or of more than one named insured's

spouse, and legal custody of that child has either never been awarded, or has been awarded jointly, then the child

shall receive benefits under the terms of the automobile policy of the named insured whose birthday occurs earliest

in the calendar year.

iii. If the child is a named insured or the spouse of a named insured, (a)1 above shall apply.

3. If neither (a)1 nor (a)2 above apply to an adult or child family member, then that family member shall

receive benefits for medical expenses under the terms of the automobile policy of the named insured whose birthday

occurs earliest in the calendar year.

4. If an automobile policy identifies more than one person as a named insured on the automobile policy, the

birthday of the named insured whose birthday occurs earliest in the calendar year shall be considered the

determinant birthday on that automobile policy.

(b) An insured shall not receive benefits for medical expenses under more than one automobile policy.

(c) If an automobile policy PIP plan provides benefits for medical expenses for an insured who is eligible for

medical expense benefits under more than one automobile policy PIP plan, the automobile insurer of the paying PIP

plan may seek equitable pro rata contributions from the other automobile policy PIP plan(s) for the benefits actually

paid by the paying PIP plan.

11:3-37.13 Penalties

Each automobile policy or health benefits plan subject to the terms of this subchapter which fails to comply with the

terms herein shall be in violation of this subchapter. Failure to comply with the terms of this subchapter may result

in the assessment of any and all penalties in accordance with the laws of this State.

11:3-37.14 Severability

If any provision of this subchapter or application thereof to any person or circumstance is held invalid, the

remainder of the subchapter and the application of such provision to other persons or circumstances shall not be

affected thereby.

N.J.S.A. 39:6A-5

g. Personal injury protection coverage benefits pursuant to section 4 of P.L.1972, c.

70 (C.39:6A-4) and medical expense benefits pursuant to section 4 of P.L.1998, c.21

(C.39:6A-3.1) shall be overdue if not paid within 60 days after the insurer is furnished

written notice of the fact of a covered loss and of the amount of same. If such written

notice is not furnished to the insurer as to the entire claim, any partial amount supported

by written notice is overdue if not paid within 60 days after such written notice is

furnished to the insurer. Any part or all of the remainder of the claim that is subsequently

supported by written notice is overdue if not paid within 60 days after such written notice

is furnished to the insurer; provided, however, that any payment shall not be deemed

overdue where, within 60 days of receipt of notice of the claim, the insurer notifies the

claimant or his representative in writing of the denial of the claim or the need for

additional time, not to exceed 45 days, to investigate the claim, and states the reasons

therefor. The written notice stating the need for additional time to investigate the claim

shall set forth the number of the insurance policy against which the claim is made, the

claim number, the address of the office handling the claim and a telephone number,

which is toll free or can be called collect, or is within the claimant's area code. Written

notice to the organization administering dispute resolution pursuant to sections 24 and 25

of P.L.1998, c.21 (C.39:6A-5.1, 39:6A-5.2) shall satisfy the notice request for additional

time to investigate a claim pursuant to this subsection. For the purpose of determining

interest charges in the event the injured party prevails in a subsequent proceeding where

an insurer has elected a 45-day extension pursuant to this subsection, payment shall be

considered overdue at the expiration of the 45-day period or, if the injured person was

required to provide additional information to the insurer, within 10 business days

following receipt by the insurer of all the information requested by it, whichever is later.

For the purpose of calculating the extent to which any benefits are overdue, payment

shall be treated as being made on the date a draft or other valid instrument which is

equivalent to payment was placed in the United States mail in a properly addressed,

postpaid envelope, or, if not so posted, on the date of delivery.

h. All overdue payments shall bear interest at the percentage of interest prescribed in the

Rules Governing the Courts of the State of New Jersey for judgments, awards and orders

for the payment of money.

i. All automobile insurers and the Unsatisfied Claim and Judgment Fund shall provide

any claimant with the option of submitting a dispute under this section to dispute

resolution pursuant to sections 24 and 25 of P.L.1998, c.21 (C.39:6A-5.1, 39:6A-5.2).