This legislation was recently signed into law by Governor Whitman as P.L.2000, c.61 (N.J.S.A.39:3-40.6).  The intent of the legislation is to reduce the likelihood that uninsured motor vehicles would be operated On the New Jersey roadways where motor vehicle insurance is required.  The provisions of the bill require proof of valid motor vehicle insurance prior to the release of an impounded motor vehicle by a State or local law enforcement authority which impounded the vehicle except where the recovery or salvage of the impounded motor vehicle is by or on behalf of, an insurer, financial institution or other lending entity. 

In a letter to Bob Martin, Mary C. Beaumont, Senior Counsel of the New Jersey State Legislature, Office of Legislative Services states the following:

 “With respect to your query, you were specifically interested in the situation where a motor vehicle owner is unable to afford storage fees for an impounded motor vehicle, seeks to retrieve his vehicle, but cannot present proof of valid motor vehicle insurance.  In this instance, it may not be released to the owner without proof of insurance, for the intent of the recent legislation is to prevent people from driving without insurance.  However, if a person takes possession of a motor vehicle without insurance, the vehicle registration would have to be cancelled and the license plates turned into the Division of Motor Vehicles so that the motor vehicle could no longer be legally operated on the roadways and therefore would not be required to be covered by insurance. 

Finally, P.L.2000 c.61 does provide that the recovery of salvage of an impounded motor vehicle by or on behalf of, an insurer, financial institution or other lending entity, shall not require proof of valid motor vehicle insurance.”