Current through Register Vol. 56, No. 6, March
18, 2024
(a) An insurer,
by itself or through its authorized producers, may defer the mandatory
inspection required by
11:3-36.3 for seven calendar days
following the effective date of coverage, upon an insured's requests for
coverage for automobile physical damage insurance on an additional or
replacement automobile.
(b) An
insurer may defer the mandatory inspection under any of the following
circumstances:
1. On new business for seven
calendar days following the effective date of coverage. For purposes of this
paragraph, the calculation of seven days shall commence the day after coverage
becomes effective; and
2. On
replacement automobiles, an insurer may provide the same type and level of
physical damage coverage which covered the replaced automobile, without a
request for coverage by the insured. Such automatic coverage prior to the
insured's request for coverage shall be for a period of three days, including
the day on which the automobile is acquired. The three-day period shall be
extended by one day for each Saturday, Sunday or any New Jersey State legal
holiday falling within the period. The insurer's election shall apply only to
automobiles replacing covered automobiles which were insured by the insurer for
physical damage coverage for at least the 12-month period preceding the
replacement date and such election once made shall apply to all the insurer's
private passenger automobile insurance. An insurer which makes an election
pursuant to this clause shall file an appropriate policy endorsement with the
Commissioner and furnish a copy of such endorsement to all of its insureds who
have physical damage coverage.
(c) When an inspection is deferred pursuant
to (a) or (b) above, the insurer or producer shall:
1. At the time the insurance application is
completed, obtain the Acknowledgment of Requirement for Insurance Inspection
form (as set forth in Appendix A and incorporated herein by reference) signed
by the insured if the insured has applied for coverage in person; or
2. At the time the insurance application is
completed, confirm physical damage coverage and advise the insured of the
inspection requirements and mail the insured the Notice of Insurance Inspection
form (as set forth in Appendix B and incorporated herein by reference) if the
insured has applied for coverage by mail or by telephone. Documentation of such
verbal notices shall include the name of the person giving the
notice.
(d) In addition
to the notice requirements set forth in (c)1 and 2 above, the insurer or
producer shall furnish the insured with information about where an inspection
can be conducted and the consequences of the insured's failure to have the
automobile inspected.
1. The insurer shall
retain documentation of the required notice in (c) above in the insurer's file
on the insured.
(e) When
an insurer requires an insured's automobile to be inspected as a condition for
any annual renewal of physical damage coverage, the insurer shall provide
notice and coverage as follows:
1. Whenever a
renewal of physical damage coverage is conditioned upon inspection, the insurer
shall mail or deliver a written Notice of Insurance Inspection (Appendix B) to
the insured at least 30 days prior to the renewal date. The insurer's file on
the insured shall reflect the mailing of such notice.
2. If the insured has not responded to the
Notice of Insurance Inspection, the insurer shall, at least 10 days prior to
the expiration of the above 30-day deferral period, mail a second Notice of
Insurance Inspection to the insured, to the producer of record, and any
lienholders, restating that failure to have the automobile inspected prior to
the expiration of the deferral period will result in suspension of physical
damage coverage. A certificate of mailing of the second notice to the insured
shall be retained by the insurer. The insurer shall assist the insured in
arranging a convenient appointment for the required inspection. The written
notice of the inspection requirement shall clearly inform the insured of the
failure to comply with the inspection requirement will result in the suspension
of automobile physical damage coverage. The notice shall also state that a copy
of the inspection report will be given to the insured.
(f) An insurer shall decide whether to defer
an inspection based solely on underwriting criteria and not based on age, sex,
race, or marital status of the insured, the principal place of garaging, or the
fact that a policy is insured in the residual market.
