Make Sure You Are Protected!

In the State of New Jersey Underinsured Motorist coverage “is optional first party coverage insuring the policy holder, and others, against the possibility of injury or property damage caused by the negligent operation of a motor vehicle whose liability insurance coverage is insufficient to pay for all losses suffered. The nature of the coverage is defined by N.J.S.A. 17:28–1.1e.”  French v. New Jersey Sch. Bd. Ass'n Ins. Grp., 149 N.J. 478, 482 (1997). A motor-vehicle tortfeasor is “underinsured” only when all the liability coverage insuring his or her purportedly underinsured vehicle is less than the UIM benefits “held” by the UIM claimant. See N.J.S.A. 17:28–1.1e; Prudential Prop. & Cas. Ins. Co. v. Johnson, 238 N.J.Super. 1, 568 A.2d 1193 (App.Div.1989); Nikiper v. Motor Club of Am. Cos., 232 N.J.Super. 393, 557 A.2d 332 (App.Div.), certif. denied, 117 N.J. 139, 564 A.2d 863 (1989); Craig & Pomeroy, supra, Chapter 27:4–1 at 352. French v. New Jersey Sch. Bd. Ass'n Ins. Grp., 149 N.J. 478, 483 (1997). “ Once that threshold analysis results in a potential UIM claim (that is, the UIM limits “held” by the injured are in excess of the total liability limits covering the allegedly underinsured tortfeasor), recovery against the UIM coverage results only when the insured demonstrates that his or her damages exceed the liability limits involved.”  “The plain meaning of [N.J.S.A. 17:28–1.1e] is that underinsured motorist benefits are available if (and to the extent that) the tortfeasor's liability limits are lower than the limits of the underinsured motorist coverage contained in the plaintiff's policy.”  Id.

“The statute produces the same result if there is one injured claimant or many, or if the amount of damages exceed the tortfeasor's liability limits, or even if multiple claims against one tortfeasor are, because of his liability limits, settled for amounts which are individually less than the underinsured motorist coverage available from the claimants' policy.”  Id.   “A tortfeasor is not underinsured relative to plaintiff's damages, or relative to the judgment or judgments against him, but rather relative to the limits of the underinsured motorist coverage purchased by or for the person seeking recovery.”  French v. New Jersey Sch. Bd. Ass'n Ins. Grp., 149 N.J. 478, 483–84 (1997). 

As such, make sure that you review your policy of insurance and that you are protected by having sufficient Underinsured Motorist Coverage!