SENATE, No. 781

STATE OF NEW JERSEY

219th LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION

 


 

Sponsored by:

Senator† NICHOLAS P. SCUTARI

District 22 (Middlesex, Somerset and Union)

Senator† NELLIE POU

District 35 (Bergen and Passaic)

 

 

 

 

SYNOPSIS

†††† Requires motor vehicle insurance policies to include certain underinsured and uninsured motorist coverage.

 

CURRENT VERSION OF TEXT

†††† Introduced Pending Technical Review by Legislative Counsel.

††


An Act concerning motor vehicle insurance and amending P.L.1968, c.385 and P.L.1972, c.70.

 

†††† Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

†††† 1.††† Section 2 of P.L.1968, c.385 (C.17:28-1.1) is amended to read as follows:

†††† 2.††† a.† Except for a basic automobile insurance policy, no motor vehicle liability policy or renewal of such policy of insurance, including a standard liability policy for an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), insuring against loss resulting from liability imposed by law for bodily injury or death, sustained by any person arising out of the ownership, maintenance or use of a motor vehicle, shall be issued in this State with respect to any motor vehicle registered or principally garaged in this State unless it includes coverage in limits for bodily injury or death as follows:

†††† (1)†† an amount or limit of $15,000.00, exclusive of interest and costs, on account of injury to, or death of, one person, in any one accident, and

†††† (2)†† an amount or limit, subject to such limit for any one person so injured or killed, of $30,000.00, exclusive of interest and costs, on account of injury to or death of more than one person, in any one accident, under provisions approved by the Commissioner of Banking and Insurance, for payment of all or part of the sums which the insured or his legal representative shall be legally entitled to recover as damages from the operator or owner of an uninsured or underinsured motor vehicle, or hit and run motor vehicle, as defined in section 18 of P.L.1952, c.174 (C.39:6-78), because of bodily injury, sickness or disease, including death resulting therefrom, sustained by the insured, caused by accident and arising out of the ownership, maintenance, operation or use of such uninsured or hit and run motor vehicle anywhere within the United States or Canada; except that uninsured and underinsured motorist coverage shall provide that in order to recover for non-economic loss, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), for accidents to which the benefits of section 4 (C.39:6A-4) of that act apply, the tort option elected pursuant to section 8 (C.39:6A-8) of that act shall apply to that injured person.

†††† All motor vehicle liability policies, except basic automobile insurance policies, shall also include coverage for the payment of all or part of the sums which persons insured thereunder shall be legally entitled to recover as damages from owners or operators of uninsured or underinsured motor vehicles, other than hit and run

motor vehicles, because of injury to or destruction to the personal property of such insured, with a limit in the aggregate for all insurers involved in any one accident of $5,000.00, and subject, for each insured, to an exclusion of the first $500.00 of such damages.

†††† b.††† Uninsured and underinsured motorist coverage shall be provided [as an option] by an insurer to the named insured electing a standard automobile insurance policy up to at least the following limits: $250,000.00 each person and $500,000.00 each accident for bodily injury; $100,000.00 each accident for property damage or $500,000.00 single limit, subject to an exclusion of the first $500.00 of such damage to property for each accident [, except that the]. The limits for uninsured and underinsured motorist coverage, as provided by the insurer and purchased by the insured, shall [not exceed] be identical to the insured's motor vehicle liability policy limits for bodily injury and property damage, respectively.

†††† Rates for uninsured and underinsured motorist coverage for the same limits shall, for each filer, be uniform on a Statewide basis without regard to classification or territory.

†††† c.†††† Uninsured and underinsured motorist coverage provided for in this section shall not be increased by stacking the limits of coverage of multiple motor vehicles covered under the same policy of insurance nor shall these coverages be increased by stacking the limits of coverage of multiple policies available to the insured.† If the insured had uninsured motorist coverage available under more than one policy, any recovery shall not exceed the higher of the applicable limits of the respective coverages and the recovery shall be prorated between the applicable coverages as the limits of each coverage bear to the total of the limits.

†††† d.††† Uninsured and underinsured motorist coverage shall be subject to the policy terms, conditions and exclusions approved by the Commissioner of Banking and Insurance, including, but not limited to, unauthorized settlements, non-duplication of coverage, subrogation and arbitration.

†††† e.†††† For the purpose of this section, (1) "underinsured motorist coverage" means insurance for damages because of bodily injury and property damage resulting from an accident arising out of the ownership, maintenance, operation or use of an underinsured motor vehicle. Underinsured motorist coverage shall not apply to an uninsured motor vehicle.† A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery.† A motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments.† The limits of underinsured motorist coverage available to an injured person shall be reduced by the amount he has recovered under all bodily injury liability insurance or bonds;

†††† (2)†† "uninsured motor vehicle" means:

†††† (a)†† a motor vehicle with respect to the ownership, operation, maintenance, or use of which there is no bodily injury liability insurance or bond applicable at the time of the accident;

†††† (b)†† a motor vehicle with respect to the ownership, operation, maintenance, or use of which there is bodily injury liability insurance in existence but the liability insurer denies coverage or is unable to make payment with respect to the legal liability of its insured because the insurer has become insolvent or bankrupt, or the Commissioner of Banking and Insurance has undertaken control of the insurer for the purpose of liquidation;

†††† (c)†† a hit and run motor vehicle as described in section 18 of P.L.1952, c.174 (C.39:6-78); or

†††† (d)†† an automobile covered by a special automobile insurance policy pursuant to section 45 of P.L.2003, c.89 (C.39:6A-3.3).

†††† "Uninsured motor vehicle" shall not include an automobile covered by a basic automobile insurance policy; an underinsured motor vehicle; a motor vehicle owned by or furnished for the regular use of the named insured or any resident of the same household; a self-insurer within the meaning of any financial responsibility or similar law of the state in which the motor vehicle is registered or principally garaged; a motor vehicle which is owned by the United States or Canada, or a state, political subdivision or agency of those governments or any of the foregoing; a land motor vehicle or trailer operated on rails or crawler treads; a motor vehicle used as a residence or stationary structure and not as a vehicle; or equipment or vehicles designed for use principally off public roads, except while actually upon public roads.

†††† f.†††† Notwithstanding the provisions of this section or any other law to the contrary, a motor vehicle liability policy or renewal of such policy of insurance, insuring against loss resulting from liability imposed by law for bodily injury or death, sustained by any person arising out of the ownership, maintenance or use of a motor vehicle, issued in this State to a corporate or business entity with respect to any motor vehicle registered or principally garaged in this State, shall not provide less uninsured or underinsured motorist coverage for an individual employed by the corporate or business entity than the coverage provided to the named insured under the policy. A policy that names a corporate or business entity as a named insured shall be deemed to provide the maximum uninsured or underinsured motorist coverage available under the policy to an individual employed by the corporate or business entity, regardless of whether the individual is an additional named insured under that policy or is a named insured or is covered under any other policy providing uninsured or underinsured motorist coverage.

(cf: P.L.2007, c.163, s.1)

 

†††† 2.††† Section 14 of P.L.1972, c.70 (C.39:6A-14) is amended to read as follows:

†††† 14.† Every owner or registrant of an automobile or autocycle registered or principally garaged in this State shall maintain uninsured and underinsured motorist coverage as provided in P.L.1968, c. 385 (C.17:28-1.1).

(cf: P.L.2016, c.35, s.6)

 

†††† 3.††† This act shall take effect on the first day of the fourth month after enactment and shall apply to policies entered into on or after that date.†

 

 

STATEMENT

 

†††† This bill makes it mandatory that a motor vehicle insurance policy have underinsured and uninsured motorist coverage identical to the insured's motor vehicle liability policy limits for bodily injury and property damage, respectively. Underinsured and uninsured motorist coverage protects the insured against damages and injuries caused by drivers who are uninsured or inadequately insured.

†††† Current law provides that the minimum amounts of uninsured motorist coverage required to be maintained by an insured under a standard policy are $15,000 per person and $30,000 per accident, and $5,000 for property damage. As a practical matter, the Department of Banking and Insurance also requires an insured under a standard policy to maintain these same minimum amounts for underinsured motorist coverage. The bill clarifies the departmentís requirement as to underinsured motorist coverage. The bill also requires that the policy limits for uninsured and underinsured motorist coverage, as provided by the insurer and as purchased by the insured, must be the same as the limits on the liability insurance coverage purchased by the insured.