In Drysten v. Chiesa and USAA, the Appellate Division of the New Jersey Superior Court found that the insurer was immune from suit under the New Jersey statute governing immunity for insurers based on the insured’s election of motor vehicle coverages. While the insured attempted to gain additional benefits by having the policy reformed post-accident, the court determined that the insurer’s strict compliance with the statutory requirements and the insured’s breach of her duty to read insurance documents and alert the insurer as to any inconsistencies in coverage, resulted in a finding of immunity for the insurer.
Plaintiff was injured in a car accident on September 1, 2012 and thereafter settled with the driver of the car that hit her for the limit of the driver’s automobile liability insurance coverage. Plaintiff then filed a claim with her insurer, United Services Automobile Association (“USAA”) for uninsured/underinsured (“UIM”) benefits. At that time, Plaintiff discovered that her UIM benefits were only $100,000/300,000 instead of the maximum amount of $500,000/1,000,000.
According to Plaintiff, her husband had increased all benefits under the policy, including the UIM benefits, on March 1, 2007 during a telephone conference with a customer service representative at USAA to get the “max protection” for the family. Plaintiff filed suit against USAA seeking reformation of the policy to provide the higher UIM benefits and bringing causes of action for breach of contract and violation of the Consumer Fraud Act.
In its defense, USAA filed a Motion for Summary Judgment contending that it was immune from liability under N.J.S.A. 17:28-1.9. This statute shields insurers from liability for damages arising from the election of a given level of motor vehicle coverage as long as the limits provide at least the minimum coverage provided by law, the insurer did not cause the insured’s alleged damages by any willful, wanton or grossly negligent act or omission, and the insurer complied with statutory coverage selection requirements. In addition, the insurer must have obtained an insured’s acknowledgment that the available UIM limits were explained to him and that the insurer will not be liable for the insured’s selection of coverage under the statute.
The court examined the factual record and compared it with the various statutory requirements to determine whether USAA qualified for immunity under the statute. Among other things, the court found that Plaintiff maintained more than the minimum coverage required by law, that USAA sent the statutorily required documents to Plaintiff at the inception of the policy, that the insured sent a completed and executed coverage selection form to USAA at that time, and that USAA sent the required documentation upon each policy renewal. While Plaintiff argued that USAA was required to obtain a new signed coverage selection form from Plaintiff after the March 1, 2007 call, the court disagreed and found that there was no requirement for USAA to obtain a signed coverage selection form mid-term. The court further found under the facts of the case that the statute did not require USAA to obtain a signed coverage selection form from the insured on the policy renewal date of July 17, 2017, although the insured could have submitted one at her option if she wanted to make any changes to the policy.
In addition, Plaintiff argued that USAA acted in willful and wanton conduct by deliberately failing to increase the IUM benefits as requested on March 1, 2007, which caused Plaintiff’s damages. Again, the court disagreed and found that Plaintiff was the cause of her own damages. Looking at the record, the court determined that Plaintiff repeatedly breached her duty to review the declaration page and other documents provided by USAA, which would have demonstrated that the amount of UIM coverage was not the higher amount Plaintiff requested during the 2007 call. It was Plaintiff’s obligation to alert USAA if the policy was inconsistent with her choices under the policy. Since Plaintiff failed to do so, USAA’s conduct was not the cause of the damages.
