New Jersey
Insurance Regulations
NEW JERSEY ADMINISTRATIVE CODE...Title 11. Department of Banking and Insurance...Division of Insurance...Chapter 3 -- AUTOMOBILE INSURANCE...Subchapter 8. Acceptance, Renewal, Nonrenewal and Cancellation of Automobile Insurance Policies
New Jersey Administrative Code, Title 11, Chapter 3 readopted in its entirety by R.2006 d.243, eff. 6/7/2006 (expires 6/7/2011)
NJAC 11:3-8.9
Standards for cancellation
(a) Pursuant to N.J.S.A. 17:29C-7, a notice of cancellation shall be effective only when based on one or more of the following reasons:
1. Nonpayment of premium;
2. The driver's license or motor vehicle registration of the named insured has been suspended or revoked during the policy period;
3. The driver's license or motor vehicle registration of another named insured or person insured under the policy who either resides in the same household or customarily operates an automobile insured under the policy has been suspended or revoked during the policy term for one or more of the following reasons:
i. Conviction of operating a motor vehicle under the influence of alcohol or drugs (N.J.S.A. 39:4-50);
ii. Conviction of refusal to submit to a chemical test (N.J.S.A. 39:4-50.4a);
iii. Conviction of vehicular homicide (N.J.S.A. 2C:11-2);
iv. Conviction of operating a motor vehicle while driving privilege is suspended (N.J.S.A. 39:3-40), except for convictions under N.J.S.A. 39:3-40i;
v. Conviction of operating a motor vehicle without liability insurance (N.J.S.A. 39:6B-2);
vi. Conviction of misrepresentation of insurance coverage (N.J.S.A. 39:6A-15);
vii. Accumulation of motor vehicle penalty points pursuant to N.J.S.A. 39:5-30.5;
viii. By a court upon conviction of one of the following motor vehicle violations: racing on a highway (N.J.S.A. 39:5C-1); failure to pass to right of vehicle proceeding in opposite direction (N.J.S.A. 39:4-84); tailgating (N.J.S.A. 39:4-89); reckless driving (N.J.S.A. 39:4-96); exceeding a speed limit by 30 MPH or more (N.J.S.A. 39:4-99); improperly passing a school bus (N.J.S.A. 39:4-128.1); or leaving the scene of an accident in which personal injury occurred (N.J.S.A. 39:4-129); or
ix. Where evidence exists that the suspended or revoked operator has been driving the vehicle during the period of suspension or revocation;
4. The named insured knowingly provided materially false or misleading information in connection with any application for insurance, renewal of insurance, or in connection with the filing of a claim for benefits under an insurance policy; or
5. An insurer determines, within 60 days of issuance of the policy, that the named insured does not meet the acceptance criteria of the insurer in effect on the date of application.
Note:— This rule becomes operative on January 1, 2009.
PROHIBITED REASONS
Insurers are prohibited from cancellation based on any of the
following:
a. Underwriting guidelines which are arbitrary, capricious or
unfairly discriminatory.
b. The sex and/or the marital status of the insured.
c. Unfair discrimination because of the race, creed, color,
national origin or ancestry or any intent to make any such
discrimination against any person or group of persons.
d. Unfair discrimination solely due to the age of the insured in
the extension of any automobile liability policy.
e. Discrimination in any form based on blindness or partial
blindness or other physical or mental impairment unless based
on sound actuarial principles.
NOTICE REQUIREMENTS
TIME PERIOD
1. Nonpayment of premium requires 15 days notice and not more
than 30 days in advance of its effective date. However, if
the insured has paid a portion of the premium to the insurer,
the date of cancellation may not be earlier than 10 days prior
to the last full day of which the premium received would pay
for coverage on a pro rata basis.
2. Other reasons require 20 days notice.
3. When calculating the time period for sending a notice the
first day is not included in the count and the last day is
included unless it is a Saturday, Sunday or legal holiday,
then the next business day is the last day.
PROOF OF NOTICE
1. The notice may be sent by:
a. certified mail; or
b. regular mail, supported by a date-stamped proof of
mailing from the Post Office showing the name and address
of the insured and/or mortgagee.
2. The insurer must retain a duplicate of the mailed notice that
is certified to be a true copy.
