Current through Register Vol. 56, No. 18, September 16, 2024
(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.
