A lie about where a car is garaged can save premium but defeated UM claims

Deemer’s Articles of Association, like the one enacted in New Jersey, consider a car insurance company that sells insurance both in New Jersey and in other jurisdictions to have provided the minimum PIP coverage required by New Jersey law. IN Juan Guiterrez-Ganan v. Allstate Insurance Companyno. A-0646-20, Superior Court of New Jersey, Appellate Division (April 1, 2022) Juan argued that the Deemer Charter forced Allstate to provide uninsured motorist coverage.

Juan Guiterrez-Ganan was injured in a car accident when his car was hit by a car driven by an underinsured motorist. The plaintiff sued his insurance company, defendant Allstate Insurance Company (defendant or Allstate), for the purpose of obtaining underinsured car benefits for his damages and losses.

The district court granted summary judgment to Allstate and dismissed his claim.

FACTS

On April 29, 2016, the plaintiff’s car was parked in the back as he drove his vehicle near an intersection in Atlantic City. The driver of the other car was drunk and underinsured. As a result of the accident, the plaintiff suffered personal injuries.

But several years before 2016, the plaintiff had lived in Georgia. While in Georgia, he bought a 2010 Audi Q5, registered the car in Georgia and received insurance coverage in Georgia from Allstate. In 2016 and for at least two years before that, the garage lived its car in New Jersey.

Nevertheless, in 2016, the plaintiff continued to register his car in Georgia and continued to purchase car insurance issued by Georgia from Allstate. In his application for renewal filed in December 2015, for insurance coverage from January 2016 to July 2016, the plaintiff stated his address on a street in “Savannah, Georgia.” At the time, the plaintiff had a New Jersey driver’s license with his address in “Galloway, New Jersey.” The plaintiff’s 2016 policy from Allstate did not include medical car payments or personal injury protection (PIP).

The plaintiff admitted that at the time of the accident in April 2016, he was resident in New Jersey and had maintained and garageed his car in New Jersey for at least one and a half years prior to the accident.

Following the accident, Allstate paid $ 15,015.48 for medical expenses incurred by the plaintiff, but refused to pay additional money. In February 2019, the plaintiff sued Allstate for seeking underinsured motorist benefits. The district court explained the reasons for its decision in the minutes, but after the plaintiff appealed, the court reinforced its reasons in a written opinion.

The trial court found that the plaintiff’s Georgia insurance did not include health care cost coverage required by New Jersey law. The trial court therefore held that the plaintiff’s claim against Allstate was time barred under NJSA 39: 6A-4.5 (a). In that decision, the trial court rejected the plaintiff’s argument that NJSA 17: 28-1.4, the “Deemer Charter,” in practice meant that he had maintained the minimum coverage required by New Jersey law.

ANALYSIS

The appeal involved the interpretation of NJSA 39: 6A-4.5 which was applied to the undisputed essential facts.

Every owner of a car that is primarily a New Jersey garage must have a minimum liability insurance policy, including a $ 15,000 faultless PIP coverage per person. Each standard car liability insurance must include benefits for protection against personal injury. To determine if a car is primarily a garage in New Jersey, the most important thing to consider is where the vehicle is mainly or mainly kept or stored most of the time. In addition, all drivers moving to New Jersey must obtain a New Jersey driver’s license and register their car within sixty days of becoming resident.

The statutory provision promotes a cost limitation policy by ensuring that an injured, uninsured driver does not benefit from the pool of accident insurance policies to which he or she has not contributed. The law gives the uninsured driver a very powerful incentive to comply with the compulsory insurance laws: obtain car liability insurance or lose the right to retain a lawsuit for both financial and non-financial damages.

Under New Jersey law, the plaintiff was guilty but failed to maintain coverage of medical expenses. Sure, that coverage was available to him in his Georgia policy, but he chose not to pay for it. By applying the clear language of NJSA 39: 6A-4.5 (a), the plaintiff is prevented from requesting recovery of financial or non-financial losses.

The plaintiff claimed that the bar in NJSA 39: 6A-4.5 (a) did not apply to him because he was not driving an uninsured car at the time of the accident. Under the Deemer Charter, a car insurance company that sells insurance in both New Jersey and other jurisdictions is considered to have provided the minimum PIP coverage required by New Jersey law.

The general purpose of the law is to ensure that residents of New Jersey who are injured as a result of an accident with a vehicle outside the state will have access to insurance that is at least as wide as the presumptive minimum limits for insurance in New Jersey. The Deemer Charter requires insurers authorized to conduct auto insurance business in New Jersey to provide coverage to residents outside the state in accordance with New Jersey law whenever the car or motor vehicle insured under the insurance is used or used in that state.

The plaintiff argued that his policy, by virtue of this Deemer Charter, included PIP benefits; therefore, he was not uninsured. Allstate provided the plaintiff with the benefit under the Deemer Charter and paid his medical expenses up to $ 15,000. Although the Deemer Charter applied, the plaintiff’s action is still statute-barred under NJSA 39: 6A-4.5 (a) because he failed to maintain PIP benefits under New Jersey law.

The Court of Appeal interpreted the phrase “while driving an uninsured car” as driving a car that did not have the required PIP coverage. The plaintiff was prevented from suing Allstate for underinsured or uninsured benefits in order to seek financial and non-financial losses as a result of the car accident in April 2016.

The action brought by the plaintiff was an insult to an insurer who paid his medical bills even though he had obtained the insurance under false circumstances by claiming that he lived in Georgia and that his car was a garage in Georgia. Instead of paying something, Allstate should have considered repealing the policy because it was obtained through deliberate and material fraud. The court, even if it reached a manifestly correct decision, should have reported the plaintiff to the New Jersey Insurance Department Fraud Division because the insurance he received from Allstate was based on a materially false factual basis.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

Subscribe to Zalma on Insurance at locals.com https://zalmaoninsurance.local.com/subscribe.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.