The directive by the New Jersey Department of Banking and Insurance follows an executive order Gov. Phil Murphy issued Thursday to extend grace periods for health, life, property and casualty insurance policies, part of a wave of relief measures unveiled as the coronavirus case and death toll continue to climb in the second hardest-hit state.
"We know that many New Jerseyans are facing financial hardship due to the unprecedented COVID-19 emergency. These actions will allow residents and businesses a grace period on premium payments for health insurance policies, as well as homeowners, renters, life and auto insurance," NJDOBI Commissioner Marlene Caride said in a statement.
She went on to thank Murphy and the insurance industry for helping to ease the financial burden for policyholders.
The required extensions include a minimum 60-day grace period for health and dental insurance policies and a minimum 90-day grace period for life, auto, homeowners and renters insurance. Under the order, insurers are barred from cancelling policies for nonpayment of premiums. The directive also applies to carriers issuing Medicare Supplement Insurance plans and insurance premium finance companies.
Policyholders must contact their insurance company to request an emergency grace period and discuss payment options for after the grace period ends.
Insurers must waive late fees and certain rules that, as a result of the coronavirus, could serve as a barrier to coverage. They must refrain from negative reporting to credit agencies and allow for amounts owed during the grace period to be paid in installments.
In addition to premium payments, the grace period also extends the time to exercise policyholder and contract holder rights and benefits under life insurance and annuity contracts.
Also, all carriers must post grace period information on their websites and provide each policyholder with a written description of the grace period's terms.
The NJDOBI said it will monitor the pandemic situation and extend the grace period directive if necessary.
Murphy has issued a wave of executive orders amid the unfolding coronavirus crisis effort to send a financial lifeline to businesses and consumers facing lost revenue and work. Last month, he announced that he'd secured commitments from Citigroup, JPMorgan Chase and other banking powerhouses to provide mortgage forbearance and other financial protections to homeowners struggling financially as a result of COVID-19. On April 1, he extended the tax filing deadline to July 15.
--Editing by Adam LoBelia.
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