NJ UIM Coverage: What Are Your Limits?

For years auto insurance in New Jersey was a hot topic as the Legislature wrangled with how to make no fault insurance cost effective. The result was a very defined statutory scheme that requires all liabilities policies to include uninsured and underinsured motorist protection.

Of course, individuals have options, including just how much protection they want to purchase. In the realm of uninsured/underinsured protection, an insured can choose what limits they would like to have. However, they must be aware that the limit they select will strictly bind them.

In Aggour v. GEICO, the plaintiff was injured in a multi-vehicle accident involving injuries to a number of individuals. The tortfeasor driver had policy limits of $100,000 per person and $300,000 aggregate. Coincidentally, the plaintiff had the same per person policy limit for underinsured coverage. Because of the multiple claimants, the plaintiff’s settlement share was less than she believed she would have been entitled. However, her insurer denied coverage inasmuch as the policy limits were identical.

GEICO’s motion for summary judgment was granted based upon N.J.S.A. 17:28-1.1(e)(1) since the tortfeasor had the same liability limit as the underinsured motorist limit applicable to plaintiff’s policy. The appellate division agreed that the comparison of policy limits determines whether a claim for underinsured coverage may prevail. That there may have been a shortfall in coverage due to multiple settlements is of no consequence.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com