Insurers Support N.J. Supreme Court Ruling on Single ‘Per Person’ Limit

January 23, 2004

The New Jersey Supreme Court issued a unanimous decision Thursday supporting the insurance industry’s views that wrongful death and survival actions do not trigger separate “per person” coverage claims under an automobile liability insurance policy.

State Supreme Court justices reversed the New Jersey Appellate Division holding in Vassiliu v. Daimler Chrysler Corporation that a plaintiff’s wrongful death and survivor claims constitute separate bodily injuries under the policy, which would have entitled the plaintiff to separate bodily injury coverage for each injury alleged.

The Supreme Court held that because “Vassiliu’s survival and wrongful death actions are derivative of and dependent on the decedent’s injuries, including his death, those actions are subject to a single ‘per person’ limit in the Prudential liability policy as well as the two underinsured motorist policies. In addition, the UIM carriers are entitled to a credit for the amount received from the products liability settlement.”

Insurance trade associations joined together to file an amicus brief to ask the New Jersey Supreme Court to reverse the appellate court’s ruling.

“We hail the Supreme Court’s decision because it recognized the plain language and clear limits of the insurance contract at issue and it recognized the intent of New Jersey law, which states that wrongful death and survival actions are derivative of the single bodily injury of the victim,” said Richard Stokes, regional manager and counsel of the Property Casualty Insurers Association of America. “The appellate court ruling would have significantly expanded insurers’ liability. Most importantly, this case helps hold down costs for policyholders.”

In the original case of Vassiliu v. Daimler Chrysler Corporation, the wife of a man killed in an auto accident sued several defendants. The Superior Court determined the at-fault driver was 100 percent liable and granted total damages and prejudgment interest award of more than $2 million.

The plaintiff later filed an UIM claim against the at-fault driver, requiring two insurers to pay from their respective UIM policies. The insurers appealed, arguing that the trial court erred in ordering separate policy limits for the wrongful death claims and the survivor claim. The appellate court concluded that the estate and the decedent’s heirs were each a separate “person” injured by the accident, despite the fact that the victim was the sole individual who suffered bodily injuries from the accident.

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