The New Jersey Supreme Court recently found in favor of New Jersey Manufacturers Insurance Co. in two important cases, ruling against plaintiffs who filed lawsuits against the automobile insurance company for compensation under their uninsured motorist policies.
These decisions are extremely significant, as they allow auto insurance companies to refuse to compensate policy holders with uninsured motorist benefits under certain circumstances. Overall, this will have serious repercussions for New Jersey drivers who sustain injuries during motor vehicle accidents with uninsured or underinsured drivers.
To fully comprehend the meaning of the State’s findings, one must have a reasonable foundation of knowledge with regard to uninsured motorist benefits in New Jersey. Specifically, State law addresses these issues in the 1972 Uninsured Motorist Act, which requires drivers who maintain Standard Automobile Insurance policies to include “Uninsured Motorist Coverage” as a means by which to ensure that they will remain covered even if they are injured during an accident with another driver who either does not have an auto insurance policy (uninsured) or does not have sufficient coverage through their auto insurance policy to compensate for the other person’s injuries (underinsured).
The New Jersey Supreme Court came to 5-0 rulings in favor of New Jersey Manufacturers Insurance Co. (NJM) on Wednesday, February 18th in both cases: Badali v. New Jersey Manufacturers Insurance and Wadeer v. New Jersey Manufacturers Insurance. In each of these incidences, the plaintiffs filed lawsuits against their insurance provider for acting in “bad faith” after refusing to compensate them under their uninsured motorist benefits.
In the first case, Badali was injured when he was hit by an uninsured driver, but had obtained uninusured motorist coverage through both Harleysville Insurance Co. and NJM. The court initially ruled that each of these companies was responsible for paying half of the damages associated with Badali’s claim. Harleysville paid their share; however, NJM refused, arguing that Badali’s policy had coverage limits of $15,000 and that his policy’s language was “fairly debatable.” The New Jersey Supreme Court agreed.
In Wadeer v. New Jersey Manufacturers Insurance, the plaintiffs claimed to have been injured in an accident caused by an unidentified vehicle. The sum of their compensation was initially set at $255,175 but subsequently reduced to $100,000 due to their policy limit, with further sums awarded to compensate for their legal counsel. A court of appeals overturned the ruling that awarded them payment for legal representation, after which the Wadeers filed a bad-faith lawsuit against NJM. According to the NJ Supreme Court, this bad-faith claim was unfounded because the case had been fairly litigated and therefore, no further litigation should occur.
Representatives for the plaintiffs in both of these cases cited NJM and other insurance providers’ regular practice of denying uninsured motorist benefits based on the “fairly debatable doctrine.” Nevertheless, the State upheld the doctrine’s validity, finding in favor of the insurance company. With this type of uphill battle facing drivers who are injured in motor vehicle accidents in New Jersey, a seasoned personal injury attorney becomes an indispensable asset when seeking to successfully resolve these matters.
For additional information pertaining to this matter, view the following article: NJ Justices Say Insurers Can Reject UM Arbitration Awards