Auto Insurance Companies Now Held to Strict Deadlines on Disclosing Policy Limits in NJ

A New Jersey Law Expedites the Process of Finding out Insurance Limits after an Accident

Policy Limits Disclosure for Auto Accidents

A car accident can stall your life plans. Even if all involved parties cooperate and leave the scene, this may not occur without one or both parties experiencing significant injuries. Not only does your world feel more unsafe by the jolt to your car and your belief that safe driving prevents accidents, but the aftermath can be grueling too. You have so many things to do to get yourself back to the life you had before you had the accident. First, if you are injured, you must see a doctor, undergo treatment and recovery plan, and suffer pain and disruption in your daily activities. Maybe you cannot work for a time. Then, there is the insurance side of the equation. You must contact your insurance company, which will open a claim. The follow-up may be a recorded statement, sending signed statements, and forwarding photos of your vehicle. And if your car needs repairs, you must bring your vehicle in and perhaps rent one while it is in the mechanic’s shop.

If you are not responsible for the accident, you most likely want and expect the responsible party or insurer to pay for your damages, including medical bills, repair bills, lost income, and pain and suffering damages. But insurance companies are often slow and reluctant to pay. They want to make sure that liability is clear and the damages claim is reasonable. All too often, insurance companies stall and impede the progress of a claim by withholding information from the other party, like policy limits. Policy limits include the insured’s maximum coverage amounts for bodily and property damages. Typically, the insurer obligated to pay wants to keep the total payout as low as possible. In contrast, the victim wants the settlement amount to be as high as possible, given the range of what is possible for a particular accident. So, the insurer’s goal in withholding policy limits is to keep the claimant from knowing the true amount of financial compensation that may be available to them.

Are insurance companies required to disclose policy limits?

Withholding policy limits does nothing but delay what an attorney can eventually get from the insurance company by litigation or legal pressuring tactics. For instance, a plaintiff who files a lawsuit against the responsible party has the right to discovery, meaning all the evidence applicable to the case, like police reports, medical bills, property damage records, and insurance policy information, among other evidence. But the driver who was not at fault for the accident should not have to file a lawsuit to discover the responsible party’s policy limits covering the accident. Thus, Governor Murphy recently signed a measure into law, mandating insurers to reveal policy limits to an attorney who asks for them.

The law, S-1558/A-3444, gives insurers 30 days to provide written notice of an insurer’s personal automobile insurance policy limits to a requesting attorney. The insurer must reveal policy limits to all policies the insured holds upon an attorney demanding the information. The attorney is then obligated to keep that information confidential. The legislation aims to expedite automobile accident claim resolutions and eliminate unnecessary lawsuits. Attorneys file personal injury lawsuits on behalf of injured clients in New Jersey, for which they must obtain policy limits information, as well as when a case has not settled before the statute of limitations tolls, meaning before the latest time for filing a lawsuit runs out. The new law reduces the number of lawsuits that attorneys must file due to settlement delays.

Personal injury attorneys and prospective clients generally welcome the new law, which went into effect in July 2021.

How much can policy limits impact your caseWe, as experienced personal injury lawyers, understand that knowing how much the responsible party’s policy covers is crucial to settling a personal injury claim in our clients’ best interests. This information is highly informative when it comes to a potential settlement amount or settlement figure that may be obtained from the insurer. It also eliminates the necessity of filing an underinsured claim with an individual’s own insurance company if the other party’s insurance does not fully cover the accident damages. Overall, the new law allows more efficiency in the personal injury claim process.

Unsurprisingly, insurers and their representatives believe the law is unnecessary. Attorneys can get policy limits without the law, and those accident victims with more damages than the responsible party’s policy covers must file a lawsuit regardless. However, proponents of the bill argue that the law will cut down on unnecessary lawsuit filings and, in turn, motivate more attorneys to take cases they may not otherwise accept if they anticipate having to file a lawsuit to settle a claim.

How much can Policy Limits affect your Case?

If another driver caused your injuries in an automobile accident, you would benefit from this new law. Settling a personal injury claim is a matter of adding up all the damages you incurred from the accident once the insurer establishes fault. If the other driver or drivers in an accident caused the accident, you want to know if they are insured and for how much, to formulate your best plan of action. For example, if you injured your back and neck in the accident, you may need to see a doctor and physical therapist for treatment over several weeks. In addition, your car may need repairs. If, after completing your treatment and repairing your car, your total damages, including compensation for lost wages, pain, and suffering, and attorney’s fees, is below the typical policy limits, you can settle your claim easier than if your damages exceed those limits. But understand that most auto insurance policies cover $15,000.00 for bodily injuries to one person or $30,000.00 for more than one person.

As such, an attorney who knows the policy limits can better guide their client in what they can expect as a settlement amount, if any, and the time it will take to resolve. Without knowing the policy limits, an attorney cannot fully advise their client as to whether an insurance company’s settlement offer is even remotely fair or does not cover all the client’s damages. Often, people without attorneys representing them may settle for less than what they want or deserve because their damages totals are high, the policy coverage is low, and the cost of filing a lawsuit and waiting out the year or more it takes to go through the legal system seems like it’s not worth it. The numbers must make sense in the big picture of settlements versus lawsuits. Still, it is highly advisable to have a knowledgeable lawyer review your case before deciding how best to proceed. In some cases, the accident is grave enough that the plaintiff has no choice but to sue the responsible driver when the policy limits are too low to cover even a fraction of the damages. These decisions of filing suit or not underscore the necessity for knowing the policy limits.

If your accident and subsequent injuries occurred within the last two months, you might benefit from this new law when planning to pursue a claim for motor vehicle accident compensation. To be sure, you should speak to a personal injury attorney about the new law, how it affects your claim, and what you can expect once you know the coverage for your accident.

Contact our Personal Injury Attorneys for Guidance with Your Case

Personal injury cases can be complicated, so you will need a knowledgeable personal injury attorney to take you through all the possibilities to resolving your auto accident injury claim.

At Kamensky, Cohen & Riechelson, we have represented clients in Hamilton, Lawrence, Bristol, Willingboro, Greenwood, Wilbur, and the greater Mercer County Area. We can properly guide you in the entire process of pursuing compensation for a motor vehicle accident.

Get in contact with us at 609-528-2596 or fill out our online contact form to schedule a free and confidential consultation to discuss specifics of your accident, understand the new updates in the law, and the potential for obtaining compensation if someone else was at fault.

NJ Supreme Court Supports Car Insurer in Two Significant Cases

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