New Jersey lawmakers have introduced Senate Bill 4534, aiming to strengthen the tools available to drivers and insurers for resolving disputes over auto damage claims by mandating an “appraisal clause” in all personal auto insurance policies issued in the state.
Under the proposed legislation, every personal auto insurance policy in New Jersey would be required to include a provision allowing either the policyholder or the insurer to appoint a qualified and impartial appraiser if disagreements arise regarding the actual cash value or extent of loss following a claim. This clause would apply to claims involving repairable damage, total loss, and third-party liability settlements.
Once one party notifies the other of its intent to invoke the appraisal clause and selects its appraiser, the opposing party would have 20 calendar days to appoint their own. The two appraisers would then have 20 business days to independently assess the vehicle and determine the amount of loss or settlement.
If the appraisers fail to reach consensus, the dispute would be escalated to a neutral umpire jointly selected by them. Should the appraisers be unable to agree on an umpire within 15 calendar days, either party may petition a judge to appoint one. The umpire’s or judge’s decision would be binding and final.
Proponents argue the clause would enhance fairness and transparency for policyholders during the claims process. Critics have yet to publicly comment, and the New Jersey Insurance Department has not issued an official statement on the bill.
A similar measure was considered but did not pass committee review in Washington state in 2024. Compared to that proposal, New Jersey’s bill allows longer response and resolution periods, which some legislators believe will make the process easier for both consumers and insurers to navigate.
According to BestLink 2024 data, the largest private passenger auto insurers in New Jersey by direct premium written include Berkshire Hathaway Insurance Group (23.08%), Progressive Insurance Group (16.01%), NJM Insurance Group (13.14%), Allstate Insurance Group (9.67%), and State Farm Group (9.38%).
If enacted, Senate Bill 4534 could set a precedent in New Jersey for handling auto insurance claim disputes and potentially influence similar legislation in other states.
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