NJ Coronavirus: Insurance Payment Grace Period Extended

NEW JERSEY — The grace period for New Jersey residents who are having a hard time paying insurance premiums because of issues related to new coronavirus has been extended, Gov. Phil Murphy announced on Thursday.

“No New Jerseyan should lose their insurance because of the financial hardship caused by COVID-19,” Murphy said. " ... We can't leave them in a weaker position when this ends. We're all in this together, and we that's the only way we'll be able to come out of this together."

Murphy said he would sign the Executive Order on Thursday.

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The order will require a minimum 60-day grace period for health and dental insurance policies, and 90 days for home and auto insurance, renters insurance, life insurance, and for insurance premium-financing arrangements, among others.

The order also clarifies that all claims covered by an insurance policy must be paid out to those who are within the grace periods, according to the Governor’s Office.

It also prohibits insurers from demanding repayment of unpaid premiums all at once when the grace period ends. Those back payments must be spread out for the rest of the insurance term.

Murphy compared it to the arrangements mortgage bankers are expected to keep when their 90-day grace period is up.

"It can't just be 90 days, and then you face a big lump sum payment," Murphy said." ... It should be smoothed out over the life of your insurance payments."

Insurers will also be required to give each policyholder an “easily readable written description of the terms of the extended grace period,” Murphy said.

More information will be available once the order is signed and published, the Governor’s Office said.

Unemployment has been climbing in New Jersey since non-essential businesses were forced to close temporarily last month. As a result, New Jersey residents are facing financial difficulties.

As of Thursday, nearly 576,904 new jobless claims have been filed since March 15, according to the New Jersey Department of Labor and Workforce Development. Over the past week, nearly 215,000 new residents filed for unemployment.

"It's a new record," Murphy said. "It's one we don't like breaking, by any means."

See related: NJ Coronavirus Updates: Here's What You Need To Know