New Jersey has taken steps to temporarily delay cancellation of insurance policies for nonpayment of premiums. By executive order, Governor Murphy directed insurance companies to extend grace periods for policyholders who may have difficulty paying for their insurance because of the coronavirus, COVID-19. During this grace period, you may be able to delay payment of your premium and insurance companies are not allowed to cancel your insurance for doing so. The grace period applies to both individuals and businesses. The governor’s order includes the following types of insurance:
This article explains what has been done by the State of New Jersey and what insurance policyholders must do to prevent cancellation of their insurance policies. This information is primarily for persons who pay for their own individual insurance plans, including businesses. Please note that the grace period also applies to those who have Medicare Supplement policies, and to some employee paid insurance plans through their employer. For this last group, it is best to speak directly with your employer and, for those working at large employers, with the human resources department.
How much time do I have to pay my premium?
Under current law, an insurance company may cancel a policy for failure to pay the premium. A notice is sent to the policyholder about possible cancellation if payment is not received within a set period of time (grace period). The length of time depends on the type of insurance. The Department of Banking and Insurance (DOBI), the agency responsible for implementing the executive order, has temporarily suspended the existing grace periods and created new ones. This means that if you are experiencing a financial hardship due to COVID-19, you have more time to pay.-------------------------
|Policy||Length of grace period|
|Medical/Health||60 days (minimum)|
|Dental||60 days (minimum)|
|Automobile||90 days (minimum)|
|Homeowners||90 days (minimum)|
|Renters||90 days (minimum)|
|Life||90 days (minimum)|
|Medicare Supplement||60 days|
This does not happen automatically—you must apply and qualify for the extended grace periods. If approved, the grace periods below will apply, and your insurance coverage will not be cancelled for nonpayment of premiums during this time.
During this period, policies cannot be cancelled for nonpayment of the premium. However, the extended grace period does not change the terms of existing insurance policies. It also does not eliminate or forgive the premium payments that may become due during this period. Premiums will still be due at a later date, but can be “amortized,” or paid off over time.
Does this extension apply to everyone?
You must meet certain requirements to qualify for an extended grace period. Requirements of both insurance companies and policyholders are described below.
Policy Holder Requirements
Insurance Company Requirements
What should I do now?
Extended grace periods are not applied automatically. You must contact your insurance company to take advantage of the emergency grace periods and to discuss options to pay your premiums over time after the respective grace periods ends. Check your insurance company’s website for information about how to do this. You should also have received written information about this from your insurance company. Although different insurance companies may require different information from you, at a minimum you will need to provide the following:
Where can I get more information?
More information about these protections is available on the NJ Department of Banking and Insurance (NJ DOBI) website.
If you have a specific legal question, contact the LSNJLAWSM hotline at 1-888-LSNJ-LAW (1-888-576-5529) or apply online at www.lsnjlawhotline.org.
A note about auto insurance
Auto insurance companies are required to retroactively reduce premiums for two months (as of March 9) because of reduced driving. The reduced rates should remain in effect during the declared state of emergency.
This information last reviewed: Jun 4, 2020