Insurers Ask N.J. Supreme Court to Reverse Appellate Division’s Decision in Split Limits Case

May 2, 2003

The Alliance of American Insurers (AAI) and several other insurance trade associations have filed an amicus curiae brief with the New Jersey Supreme Court in Vassiliu v. Prudential.

At issue is a ruling by the New Jersey Appellate Division holding that a plaintiff’s wrongful death and survivor claims constitute separate bodily injuries under the policy, entitling the plaintiff to separate bodily injury coverage for each injury alleged. In its brief, the insurance groups ask the New Jersey Supreme Court to reverse this ruling.

“The effect of the Appellate Division’s ruling would be to double or triple insurers’ liability in so-called ‘split limit’ auto insurance policies, thereby hiking claims costs dramatically,” Richard Stokes, government affairs representative for the Alliance’s Northeast Region, commented.

The insurance industry friend-of-the-court brief urges the New Jersey Supreme Court to reverse the Appellate Division’s decision and hold that the plaintiff’s wrongful death and survivor claims do not constitute separate bodily injuries under the policy.

“It is our contention that the Appellate Division erred by ignoring the plain language of the insurance contract at issue, as well as the purpose of a state law (N.J.S.A. 39:6B-1) that authorizes and defines the use of split limit coverages,” Joyce Kraeger, the Alliance attorney that coordinated filing of the brief, remarked. “This statute defines coverage, not by the number of claims, but by the number of persons receiving bodily injuries as a result of the accident. Accordingly, we contend that the Appellate Division’s interpretation of the statute ignores its very purpose by permitting a separate per person recovery for any person ‘injured’ by an automobile accident, as opposed to a person who suffers a ‘bodily injury.’ As such, the Appellate decision multiples the recovery potentially available under an automobile liability insurance policy in the event that a bodily injury occurs, since there is, more often than not, a second individual who can assert an injury based on the bodily injury of another.”

The brief further contends that the Appellate court erred in “failing to review and consider the language of the policy, since the contract’s express terms provide for one recovery per person for a bodily injury to one person as a result of one accident.”

“For these reasons, the Appellate Division’s decision is contrary to New Jersey law, as well as the laws of the majority of other jurisdictions that have considered the issue,” Kraeger said.

Joining the Alliance in filing the brief was the American Insurance Association, the National Association of Independent Insurers and the Insurance Council of New Jersey.

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