New Jersey Bad Faith May Be Cemented in Legislation, April 2013

Once again, New Jersey legislators have mobilized to codify a cause of action against insurers for denials of coverage in “bad faith.”  The “Consumer Protection Act,” S-2460, was introduced in January.  If passed, it will create a private cause of action for insureds and their assignees related to unfair claims-settlement practices, in violation of N.J.S.A. 17:29B-4(9).  This cause of action has existed in New Jersey by virtue of common law, with its genesis in the New Jersey Supreme Court decision, Rova Farms Resort Inc. v. Investors Ins. Co., 65 N.J. 474 (1974).  Please contact Chris Tellner for further information about how this will impact insurance practices.