Category Archives: Personal Injury

$890,000 Car Accident Settlement

Evan M. Harris,Esq. of Aiello, Harris, Marth, Tunnero & Schiffman, P.C. settled an car accident verbal threshold case for $890,000.00. The plaintiff sustained injuries to knees when the automobile plaintiff was driving was struck by a drunk driver in violation of N.J.S.A.39:4-50.

The matter was settled after filing a lawsuit in the Middlesex County Court.

If you have been involved in a car accident in New Jersey, contact Aiello, Harris, Marth, Tunnero & Schiffman, P.C. today and we will be more than happy to answer your questions and address your concerns.

Our New Jersey personal injury attorneys keep flexible office hours, with weekend appointments available, and we can meet you in your home or hospital room if you cannot travel to our office. Call us today, or contact us online, we’re standing by to assist you at (908) 561-5577.

$85,000 Personal Injury Settlement

Timothy J. Broking, Esq. of Aiello Harris Marth Tunnero & Schiffman, P.C. settled a personal injury verbal threshold case for $85,000. The plaintiff sustained injuries to her shoulder when the automobile she was a passenger in struck a vehicle that failed to stop at a stop sign. The matter was settled promptly after filing a lawsuit in Superior Court.

If you have been involved in a motor vehicle accident in New Jersey, contact Aiello, Harris, Marth, Tunnero & Schiffman, P.C. today and we will be more than happy to answer your questions and address your concerns. Our New Jersey personal injury law firm keeps flexible office hours, with weekend appointments available, and we can meet you in your home or hospital room if you cannot travel to our office. Call us today, or contact us online, we’re standing by to assist you at (908) 561-5577.

$192,891 Workers Compensation Settlement

Timothy J. Broking, Esq. of Aiello Harris Marth Tunnero & Schiffman, P.C. appeared in Elizabeth Workers’ Compensation Court, 295 North Broad Street, Elizabeth NJ before the Honorable Theresa Yang, JWC.  Following a settlement conference, Mr. Broking was able to successfully negotiate a $192,891.00 workers’ compensation settlement on behalf of his client.  This matter was settled pursuant to an Order Approving Settlement signed by all parties in lieu of trial.
The petitioner sustained injuries to his knees and shoulders as a result of slipping on ice.  The injuries to petitioner’s knee consisted of a torn medial meniscus.  The petitioner further sustained injuries to his shoulder consisting of a torn rotator cuff.

If you have been involved in a workplace accident in New Jersey, contact Aiello, Harris, Marth, Tunnero & Schiffman, P.C. today and we will be more than happy to answer your questions and address your concerns. Our NJ personal injury attorneys keep flexible office hours, with weekend appointments available, and we can meet you in your home or hospital room if you cannot travel to our office. Call us today, or contact us online, we’re standing by to assist you at (908) 561-5577.

$97,500 Personal Injury Settlement

Timothy J. Broking, Esq. of Aiello Harris Marth Tunnero & Schiffman, P.C. settled a personal injury case for $97,500. The plaintiff sustained injuries to her neck and wrists when her automobile was struck in the rear by another vehicle that failed to yield the right of way at the intersection.

The negligent party only maintained $15,000 in available insurance coverage, however the injuries sustained by the plaintiff greatly exceeded that amount. Additional benefits were recovered following the filing of an underinsured motorist claim (UIM). The matter was settled following the commencement of a lawsuit.

If you have been involved in a car accident in NJ, contact Aiello, Harris, Marth, Tunnero & Schiffman, P.C. today and we will be more than happy to answer your questions and address your concerns. Our New Jersey personal injury lawyers keep flexible office hours, with weekend appointments available, and we can meet you in your home or hospital room if you cannot travel to our office. Call us today, or contact us online, we’re standing by to assist you at (908) 561-5577.

What are personal injury protection (PIP) claims?

Because New Jersey is a “no fault” state, medical bills for injuries sustained in an automobile accident are paid by the insured party’s own automobile insurance carrier under the personal injury protection or “PIP” provisions of the auto policy. N.J.S.A. 39:6A-1.1 et seq.  A claim for personal injury protection benefits, commonly known as “PIP” claim, can be initiated against a client’s auto carrier for medical treatment that has not been authorized or for which payment has been denied.

The type and duration of medical services covered by PIP is governed both by the terms of the particular policy and by State law. Each policy contains a PIP dollar limit selected by the insured at the time he or she purchases the policy. In addition, for policies purchased or renewed on or after March 22, 1999 and thus subject to AICRA, the course of medical treatment, particularly for soft-tissue neck and back injuries, is closely regulated by the provisions of N.J.S.A. 39:6A-1 et seq., the Automobile Insurance Cost Reduction Act of 1998 (the Act), and N.J.A.C. 11:3-3.1 et seq., the Act’s implementing regulations.

In enacting AICRA, the Legislature sought to remedy a perceived abuse of the personal injury protection (PIP) benefits mandated under this State’s no-fault laws. Specifically, the Legislature found that since the 1988 enactment of the verbal threshold, “[PIP] benefits are being overutilized for the purpose of gaining standing to sue for pain and suffering.” N.J.S.A. 39:6A-1.1. The Legislature found that certain measures were warranted in order to combat this perceived overutilization of benefits for the purpose of vaulting the tort threshold and thus enforce the “restriction on the right of persons who have non-permanent or non-serious injuries to sue for pain and suffering.” Id. The primary means chosen by the Legislature to enforce the tort threshold was to control, both procedurally and substantively, the course of treatment for victims of automobile accidents.

  1. Notice

If required by the policy (basic or standard), a treating health care provider must notify the insurer of a claim for medical expense benefits within 21 days following the commencement of treatment. N.J.S.A. 39:6A-5a. Submission of a bill or invoice will satisfy the notice requirement. N.J.S.A. 39:6A-5b. Failure to provide timely notification may result in denial of the claim and the physician may not seek direct payment from the insured where the claim is denied for failure to provide timely notification. N.J.S.A. 39:6A-5c. The insurer must pay claim for PIP benefits within 60 days, with a provision for a 45-day extension upon written notice to further investigate a claim. N.J.S.A. 39:6A-5g. Overdue payments are subject to interest as prescribed by the Rules of Court for judgments, awards and orders for the payment of money. N.J.S.A. 39:6A-5h

  1. Treatment Protocols

Under both the basic and the standard policy, the Act restricts an insured’s access to medical care by requiring that medical treatments, diagnostic tests and services provided by the policy “shall be rendered in accordance with commonly accepted protocols and [commonly accepted] professional standards and practices” for treatment of the relevant injury. N.J.S.A. 39:6A-3.1a; N.J.S.A. 39:6A-4a. Commonly accepted protocols and professional standards and practices, for purposes of the statute, are either “those recognized by national standard setting organizations, national or state professional organizations of the same discipline as the treating provider,” or those designated by the Commissioner of Banking and Insurance in consultation with the professional licensing boards. Id. Deviation from the standard protocols for treatment and/or administration of diagnostic tests may be allowed only when warranted “by reason of medical necessity.” Id.

Regulations set forth at N.J.A.C. 11:3-4.1 et seq. Identify reimbursable PIP medical expense benefits for purposes of either a standard or a basic policy. The PIP regulations apply to “those policies issued or renewed on or after March 22, 1999.” N.J.A.C. 11:3-4.1(c).

As a starting point, the regulations provide that PIP shall reimburse a provider for “all medically necessary expenses for the diagnosis and treatment of injuries sustained from a covered automobile accident,” up to the applicable limits. N.J.A.C. 11:3-4.3(a). “Medically necessary” treatment is that which is consistent with the clinically supported symptoms, diagnosis or indications of the injured person, and is:

  • not primarily for the convenience of the injured person or provider;
  • is the most appropriate standard or level of service which is in accord with standards of

good practice and standard professional treatment protocols, as such protocols may be recognized or designated by the Comissioner of Banking and Insurance, in consultation with the professional licensing boards in the Division of Consumer Affairs in the Department of Law and Public Safety, or by a nationally recognized professional organization, and

  • does not involve unnecessary diagnostic testing.

[N.J.S.A. 39:6A-2m; N.J.A.C. 11:3-4.2.]

  1. Diagnostic Tests

N.J.A.C. 11:3-4.5 defines reimbursable and nonreimbursable diagnostic tests. N.J.A.C. 11:3-4.5(a) provides that PIP medical expense benefits coverage “shall not provide reimbursement for the following diagnostic tests, which have been determined to yield no data of any significant value in the development, evaluation and implementation of an appropriate plan of treatment for injuries sustained in motor vehicle accidents.”

  • Spinal diagnostic ultrasound
  • Iridology
  • Reflexology
  • Surrogate arm mentoring
  • Surface EMG
  • Mandibular tracking and stimulation

N.J.A.C. 11:3-4.5(b) states that PIP shall provide reimbursement for the following diagnostic tests, “which have been determined to have value in the evaluation of injuries, the diagnosis and development of a treatment plan, when medically necessary and consistent with clinically supported findings”:

  • Needle EMG
  • MRI
  • CT scan
  • Dynatron/cyber station/cybex
  • Sonogram/ultrasound
  • Videofluoroscopy Thermography
  • Brain Mapping

The physician’s determination to administer any of the above tests is subject to decision point review, N.J.A.C. 11:3-4.5(d), with the exception of diagnostic tests rendered in the course of emergency care. N.J.A.C. 11:3-4.5(e).

  1. Care Paths for Neck and Back Injuries

The commissioner has designated by regulation certain medical treatment protocols, or “care paths,” as “the standard course of medically necessary treatment, including diagnostic tests,” for certain “identified injuries.” N.J.A.C. 11:3-4.6. Specifically, there are six care paths that govern the provision of treatment and diagnostic testing for spinal injuries as follows:

Care Path 1: Cervical Spine/Soft Tissue Injury

Care Path 2: Cervical Spine/Soft Tissue Injury with Radiculopathy; Herniated Disc with or without Radiculopathy; Herniated Disc with Radiculopathy and Severe neurological compression or compromise

Care Path 3: Thoracic Spine/Soft Tissue Injury

Care Path 4: Thoracic Spine/Herniated Disc with or without radicular symptoms; Soft Tissue Injury with Radiculopathy; Herniated Disc with Radiculopathy  and Severe neurological compression or compromise

Care Path 5: Lumbar-Sacral Spine/Soft Tissue Injury

Care Path 6: Lumbar-Sacral Spine/Herniated Disc with or without Radiculopathy; Soft Tissue Injury with Radiculopathy; Herniated Disc with Radiculopathy and Severe neurological compression or compromise

            Deviation from the care paths for the identified injuries is subject to close scrutiny and must be supported by documentation of special circumstances. New Jersey Coalition of Health Care Professions v. New Jersey Dept. of Banking & Ins., 323 N.J. Super. 207 (App. Div.), certif. denied, 162 N.J. 485 (1999). The care paths do not apply, however, to emergency treatment or to treatment rendered in the ten days immediately following the accident. See N.J.A.C. 11:3-4.6(d) (providing that the care paths do not apply to treatment administered during emergency care); Bulletin No: 99-05 from Jaynee LaVecchia, Commissioner of Banking and Insurance re: Decision Point Review and Precertification Filings, March 17, 1999 (directing that precertification and decision point review plans clearly state that treatment in the first ten days and emergency care do not require decision point review or precertification).

  1. Decision Point Review

All policies must provide procedures for “decision point review.” “Decision points” are “those junctures in the treatment of identified injuries where a decision must be made about the continuation or choice of further treatment.” N.J.A.C. 11:3-4.2. A decision point in the care paths is represented by a hexagon or by reference to a second opinion, referral for a second independent consultative medical opinion, or development of a treatment plan or mandatory case management. N.J.A.C. 11:3-4.6(b). In addition, a determination to administer any of the diagnostic tests listed in N.J.A.C. 11:3-4.5(b) is subject to decision point review. N.J.A.C. 11:3-4.2.

A qualified decision point review plan must establish procedures for: the injured person to provide prior notice to the insurer; the prompt review and disposition of the request by the insurer; and, where necessary, the scheduling of a physical examination to resolve the claim. N.J.A.C. 11:3-4.7(b). The insurer must notify the injured party or his designee that a physical examination will be required as part of the decision point review. Id. Where an Independent Medical Examination will be required, it must be scheduled within seven calendar days of the receipt of the request for treatment unless the injured person consents to an extension. N.J.A.C. 11:4-7(b)(2)(ii). The examination must be “at a location reasonably convenient to the injured person.” Id. An injured party must cooperate with the review by providing the IME with medical records before the scheduled examination. The insurer must advise the injured person or his designee “ whether reimbursement is authorized as promptly as possible but in no case later than three days after the examination.” N.J.A.C. 11:3-4.7(2)(vi).

A policy may provide that an injured party’s failure to provide notice, to provide medical records, or to appear for a medical examination as required by the policy may result in an additional co-payment not to exceed 50% of the eligible charge, even where the treatment is found to be medically necessary. N.J.A.C. 11:3-4.7(3).

  1. Precertification

The policy (basic or standard) may require precertification of treatment of diagnostic testing, except that no precertification may be required in the first ten days following the accident. N.J.S.A. 39:6A-3a; N.J.S.A. 39:6A-4a, N.J.A.C. 11:3-4.8(b)(c). A precertification plan may include provisions requiring an injured person to obtain durable medical equipment directly from the insurer or designee. N.J.A.C. 11:3-4.8(g).

Precertification and decision point review each require affirmative action by the insurer to deny based on the determination of a physician. Bulletin No: 99-05, supra (citing N.J.A.C. 11:3-4.7(b) and N.J.A.C. 11:3-4.8(d)). “Therefore, a failure to deny in accordance with that rule means that the treatment or test may proceed until such time as a denial based on the determination of a physician is communicated by the insurer. The [policy] should affirmatively state that if the insurer does not respond within the stated time-frame, the provider may proceed with the treatment or test.” Id.

  1. Assignment

Under either a basic or standard policy, assignment of medical expense benefits may only be made to a treating health care provider. N.J.S.A. 39:6A-3.1a; N.J.S.A.39:6A-4a. The policy may place further restrictions on the assignment of medical expense benefits that are “consistent with the efficient administration of the coverage.” N.J.A.C. 11:3-4.9.

  1. Deductibles and Copays

Each insurer must offer a standard $250 deductible and 20% copayment on medical expense benefits between $250 and $5000, N.J.A.C. 11:3-4.4(a), with an option to select higher deductibles at appropriately reduced premiums. N.J.A.C. 11:3-4.4(b). If elected, a higher deductible applies only to the named insured and resident immediate family members. N.J.A.C. 11:3-4.4(b)(1). All deductibles and copays apply on a per person, per accident basis. N.J.A.C. 11:4-4(c).

  1. Dispute Resolution

Disputes regarding the recovery of medical expense or other PIP benefits under either a basic or a standard policy may be submitted, at the request of the injured person, the insurer, or a treating health care provider to dispute resolution before a “dispute resolution professional” (DRP). N.J.S.A. 39.6A-5.1a-c; N.J.A.C. 11:3-5.2. All decisions by a DRP are binding. N.J.S.A. 39.6A-5.1c.

Among the matters that may be resolved in a PIP dispute are:

  • Interpretation of the insurance contract’s PIP provisions;
  • Whether the medical treatment or diagnostic tests are in accordance with the provisions of applicable statutes and rules for the basic and standard policies and in compliance with the terms of the policy;
  • Eligibility of the treatment or service for compensation or reimbursement, including whether the injury is causally related to the accident and the application of deductible and copay provisions;
  • Eligibility of the provider performing the service to be compensated or reimbursed under the terms of the policy and the provisions of J.A.C. 11:3-4, and including whether the provider is licensed or certified to perform the treatment or service;
  • Whether the treatment was actually performed;
  • Whether the diagnostic tests performed are recognized by the [the PIP regulations and] administered in accordance with their standards;
  • The necessity and appropriateness of consultation with other health care providers;
  • Disputes involving the application of, or adherence to, the automobile insurance medical fee schedule at J.A.C. 11:3-29;
  • Whether the treatment is reasonable, necessary and in accordance with medical protocols adopted by the Commissioner at J.A.C. 11:3-4; or
  • Amounts claimed for PIP income continuation benefits; essential services benefits, death benefits and funeral expense benefits.

[N.J.A.C. 11:3-5.2]

Disputes regarding medical necessity may be referred, at the option of the DRP or either part, to a medical review organization (MRO).  N.J.S.A. 39:6A-5.1d. The MRO may request the injured party to submit to an independent medical examination. N.J.A.C. 11:3-5.6(c)(3).

Among the issues that may be determined by an MRO are:

  • the medical necessity of the treatment or diagnostic test for which reimbursement is sought;
  • whether the treatment is in accordance with medically recognized standard protocols, professional standards, and commonly accepted practice in the relevant discipline;
  • whether the treatment is consistent with the symptoms or diagnosis;
  • whether the treatment/diagnostic test is related/necessitated by the injury sustained in the accident;
  • whether the treatment is of a palliative, rather than restorative, nature;
  • the medical necessity of repeated procedures or treatment.

[N.J.S.A. 39:6A-5.2d.]

The MRO’s determination shall be presumed correct by the DRP, which presumption may be rebutted by a preponderance of the evidence. N.J.S.A. 39:6A-5.1d. The DRP’s decision must be in writing and set forth the issues in dispute, the MRO’s findings, if any, the DRP’s findings of fact and his or her legal conclusions. N.J.A.C. 11:3-5.6(d). The award shall apportion of the costs of the proceedings without regard to who initiated it “in a reasonable and equitable manner consistent with the resolution of the issues in dispute.” Id. The award may include attorney’s fees to a successful claimant “in an amount consonant with the award.” Id.

Contact Our Experienced Accident Lawyers At Aiello Harris Today

Our New Jersey injury lawyers keep flexible office hours, with weekend appointments available, and we can meet you in your home or hospital room if you cannot travel to our office. We serve many areas of NJ for accident injury cases such as:

Call us today, or contact us online, we’re standing by to assist you at (908) 561-5577.

What are uninsured Motorists (UM) and Underinsured Motorists (UIM) Claims?

Uninsured and underinsured motorists coverage involves first-party coverage under a contract of insurance. The insured’s entitlement to coverage and the procedures for pursuing a claim are governed primarily by the contact, and those rights differ substantially from carrier to carrier. Some UM/UIM carriers, for instance, now include provisions permitting the carrier at its option to try UM/UIM matters in court rather than by way of arbitration. Therefore, as with any issue arising in auto litigation, it is absolutely essential to review the UM/UIM provisions of the particular policy before proceeding with a claim.

Uninsured Motorists Claims

Uninsured Motorist or “UM” coverage is first-party coverage that provides compensation to an insured under his or her own automobile policy for personal injury and other losses caused by an uninsured tortfeasor. New Jersey requires minimum UM coverage of $15,000/$30,000 for all motor vehicles, N.J.S.A. 17:28-1.1, with the exception of those covered by a “basic” policy, or a “special” policy, L.2003, c.89, under which UM is not available. N.J.S.A. 39:6A-3.1. Self-insured vehicles are deemed to provide minimum UM coverage. Insurers may not limit coverage to the statutory minimum and are required to offer additional UM coverage up to $250,000 per person/$500,000 per accident for bodily injury, $100,000 property damage, or $500,000 single limit per accident. An insured may not, however, purchase UM or UIM coverage that exceeds his or her liability limits. N.J.S.A. 17:28-1.1.

A tortfeasor’s vehicle is considered “uninsured” triggering a right to coverage in four situations: (1) when it is not covered by a policy of insurance on the date of the accident; (2) when the tortfeasor’s carrier disclaims coverage; (3) when the tortfeasor’s carrier becomes insolvent or declares bankruptcy; (4) when the vehicle is a “hit and run” vehicle; or (5) when the vehicle is covered by a “special” automobile policy pursuant to 545 of L.2003 c. 89. N.J.S.A. 17:28-1.1(e)(2). Underinsured vehicles, uninsured vehicles owned by the claimant, self-insured vehicles, vehicles covered by a “basic” policy, and publicly owned vehicles are not considered uninsured. Id.

A vehicle is uninsured when the tortfeasor’s liability carrier denies coverage. Common reasons for a liability carrier’s disclaiming coverage include the insured’s vehicle being used without permission, the insured’s failure to cooperate with the carrier may dispute the validity of the disclaimer, potentially impeding a claimant’s ability to proceed to the resolution of the UM claims. In that circumstance, the courts have held that a claimant need not await the resolution of the disputed disclaimer, but may proceed to UM arbitration, leaving the UM carrier later to pursue its subrogation rights against the liability carrier. See Parks v. Colonial Penn Ins. Co., 98 N.J. 42, 49 (1984); Schecter v. Selective Ins. Co., 264 N.J. Super. 299, 303-304 (App. Div. 1993)

A hit and run vehicle is one as to which “the identity of the motor vehicle and of the operator and owner thereof cannot be ascertained or it is established that the motor vehicle was, at the time said accident occurred, in the possession of some person other than the owner without the owner’s consent and that the identity of such person cannot be ascertained[.]” N.J.S.A. 39:6-78. In order to assert a UM claim based on an accident caused by a hit and run driver, the claimant must demonstrate that he or she made reasonable efforts to determine the identity of the vehicle, its owner and its operator. Scheckel v. State Farm Mut., 316 N.J. Super. 326, 332-334 (App. Div. 1998). “Hit and run” vehicles include “phantom” vehicles, or vehicles that force the claimant off the road without making physical contact with the claimant’s vehicle.

An insured’s entitlement to UM benefits and the procedures for enforcing UM coverage are governed by the contract with the UM carrier. The standard UM endorsement requires the submission of UM disputes to binding arbitration, usually before three arbitrators. The endorsement permits either party to reject an arbitration award and demand a trial of the issues if the arbitrators’ damage award exceeds the statutory minimum limits of $15,000 per person and $30,000 per accident for bodily injury and $5000 for property damage.

The standard UM endorsement provides that UM arbitration may be sought to resolve disputes concerning whether the insured “is legally entitled to recover damages under the endorsement” and regarding “the amount of damages.” Issues of coverage, such as the validity of an insurer’s disclaimer of coverage based on lack of permission or whether the insured made reasonable efforts to ascertain the identity of a hit and run driver, are generally not arbitrable and must be litigated in court. See, e.g., O’Connell v. New Jersey Mfrs. Ins. Co., 306 N.J. Super. 166 (App. Div. 1997), certif. granted, 153 N.J. 405, appeal dismissed, 157 N.J. 537 (1998); Travelers Indemnity Co. v. Mongiovi, 135 N.J. Super. 452, 459 (App. Div. 1975). Where a coverage issue arises in the course of an arbitration, the party objecting to its consideration by the arbitrator from deciding the issue or object to its inclusion in the UM proceeding, thereby preserving a right to subsequent judicial review of the coverage question. See In re Matter of Arbitration Between Grover, 80 N.J. 221 (1979). The question whether the plaintiff has satisfied the tort threshold has been held arbitrable. See Cutitta v. Selective Ins. Co., 255 N.J. Super. 748 (App. Div. 1992).

A plaintiff invokes his or her right to UM by sending a written demand to the UM carrier. The plaintiff and the UM carrier each designate a “partial” arbitrator and the two partial arbitrators select a third “neutral” arbitrator. The designation of an arbitrator is typically included in the letter demanding arbitration. The demand letter ordinarily sets forth a time limit, usually 30 days, for a response. A declaratory judgment action may be initiated to compel compliance with the UM endorsement where the carrier fails to respond, or if the two partial arbitrators have not or cannot agree on a neutral.

The UM endorsement governs the pre-hearing discovery to which the carrier is entitled. The discovery may include a statement under oath, the provision of medical releases and authorizations to submit a physical examination, and the provision of all legal documents from related suits against third parties.

The arbitration hearing is located in the county where the insured lives, unless otherwise agreed, and takes place at one of the arbitrators’ offices. Each party bears its own expenses and split the expense of the neutral arbitrator. Standard fees for arbitrators are $300-400 per arbitrator. At the hearing, all relevant evidence is considered and the formal evidence rules do not apply. Thus, for instance, reports from the plaintiff’s treating physicians and defense examiners may be considered and no personal appearance by the doctors is required.

A decision by two of the arbitrators is binding if the damages do not exceed the statutory minimum limits of $15,000/$30,000/$5000. If the damage award does exceed the statutory minimum, either party may within 60 days demand a trial. Absent a demand for trial, the arbitration award is binding.

Either party within 90 days of delivery of the award may ask for court to confirm, vacate, modify or correct the arbitration award. Judicial review of the arbitrators’ decision is, however, extremely limited. An award may be vacated only where (1) the award was procured by corruption, fraud or undue means, (2) there was evident partiality or corruption in the arbitrators, or any thereof, (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon good cause being shown therefor, or in refusing to hear the evidence, pertinent and material to the controversy, or any misbehaviors prejudicial to the rights of any party, or (4) the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter was not made. N.J.S.A. 2A:24-8.

Underinsured Motorists Claims

Underinsured Motorists or “UIM” coverage is first-party coverage that provides compensation to an insured under his or her own policy when the tortfeasor’s liability coverage is insufficient to cover the insured’s losses. UIM coverage is optional so not every policy provides it. N.J.S.A. 17:28-1.1(b). Purchasers of a “basic” policy do not have the option to carry UIM coverage.

A tortfeasor’s vehicle is considered “underinsured when

the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available [to the tortfeasor] is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking … recovery.

[French v. New Jersey School Bd. Assoc. Ins. Group, 149 N.J. 478, 484 (1997); N.J.S.A. 17:28-1.1e.]

In order to determine whether UIM coverage is triggered, it is thus necessary to compare the liability limits of any policies that the tortfeasor may look to for coverage (including his or her personal policy, the policy of a host vehicle, or any umbrella or general liability policies) with the UIM limits of any policies purchased by pr providing coverage to the injured party (including his or her personal policy, the policy of a family member residing in the household, or the policy of a host vehicle). See Magnifico v. Rutgers Casualty Ins. Co., 153 N.J. 406 (1998) (holding passenger “held” and was entitled to recover UIM  benefits under $250,000 policy issued to the driver of host vehicle); New Jersey Manufacturer’s Insurance Co. v. Breen, 153 N.J. 424 (1998) (holding daughter of named insureds under business auto policy, who was injured in an auto accident while operating her own vehicle, “held” and was entitled to receive benefit of UIM coverage included in her parents’ business auto policy that would not have been available pursuant to her personal policy); Grant v. Amica Mutual Ins. Co., 153 N.J. 433 (1998) (holding motorist who was injured in a car accident while driving his own car “held” and entitled to recover UIM benefits under automobile policy issued to his brother, with whom motorist lived ).

Although an injured party may look to several different policies both to establish underinsured status and for recovery, the limits of those policies may not be added or “stacked” to create coverage in the combined amounts. N.J.S.A. 17:28-1.1(c).

It should be noted that AICRA created a new “basic” policy under which a purchaser may opt to carry no bodily injury liability coverage at all. Notwithstanding that, a “basic” policyholder is not considered uninsured, even when he or she has no liability coverage. N.J.S.A. 17:28-1.1. Therefore, a plaintiff must resort to UIM coverage when injured at the hands of a basic policyholder.

A vehicle is not considered underinsured “unless all the limits of bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments.” N.J.S.A. 17:28-1.1(e)(1). The UIM carrier is entitled to a credit against the amount that was recovered against the tortfeasor’s liability policies. Id.

If, for example, the tortfeasor has $15,000/$30,000 liability limits, and the injured party carries $15,000/$30,000 in UIM, the tortfeasor would not be underinsured with respect to the injured party’s policy and no UIM would be available. If, on the other hand, the tortfeasor has $15,000/$30,000 liability limits and the injured party has $100,000/$300,000 in UIM, then UIM coverage would be triggered and the injured party could seek an additional $85,000 in UIM benefits after exhausting the tortfeasor’s policy limits.

UIM Arbitration

Assuming “underinsured” status is established, the next question is how to pursue a claim for UIM benefits. In order to assert a UIM claim, a plaintiff must provide proper notice to the UIM carrier at various stages in the litigation. Specifically, the plaintiff must notify the UIM carrier when (1) when suit is initiated against the tortfeasor, (2) when it is clear that the tortfeasor’s liability coverage is insufficient, and (3) when the plaintiff receives an offer of the tortfeasor’s policy limits. Rutgers Ins. Co. v. Vassas, 139 N.J. 163, 172 (1995); Rivers v. Allstate, 312 N.J. Super. 379 (App. Div. 1998). The UIM carrier is entitled to intervene in the third-party action if it wishes to, but failure to provide notice of suit may result in the UIM claim being barred. See Zirger v. General Accident Ins. Co., 144 N.J. 327 (1996). Although verbal notice has been deemed sufficient where there is no prejudice to the UIM carrier, Walsh v. State Farms Ins. Co., 301 N.J. Super. 619, 624-625 (Law Div. 1997), it is obviously far preferable to provide the UIM carrier with written notice of an offer to settle. Notice must be provided to all UIM carriers potentially liable to provide coverage.

Because the UIM carrier has a right of subrogation against the tortfeasor that would be extinguished by the claimant’s insurance of a general release to the tortfeasor’s carrier, the plaintiff cannot settle the underlying case against the tortfeasor without the permission of the UIM carrier. Longworth v. Van Houten, 223 N.J. Super. 14, 184 (App. Div. 1988). Once the plaintiff notifies the UIM carrier of the tortfeasor’s carrier offer of its policy limits in settlement of the plaintiff’s claims, the UIM carrier has two options. The carrier may consent to the settlement thereby waiving its subrogation rights. Alternatively, the UIM carrier may preserve its subrogation rights by tendering to the plaintiff the full amount of the tortfeasor’s policy limits in exchange for an assignment of plaintiff’s rights against the tortfeasor. Id. At 193-94.

If the UIM carrier within thirty days fails to respond to plaintiff’s request for permission to settle, the plaintiff may fail a declaratory judgment action seeking a determination of the issue. Id. At 194-94.

The procedures for initiating arbitration, choosing arbitrators, and paying the costs of arbitration are the same as those discussed above in the UM context.

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