Personal Injury Law Journal

Denise M. Mariani

dmariani@stark-stark.com
609.895.7345

Denise Mariani is a Shareholder in the Personal Injury Group. Prior to joining Stark & Stark, she was an associate at Lenox, Socey, Wilgus, Formidoni & Casey where she concentrated her practice on civil litigation and family law. Ms. Mariani served as judicial law clerk to The Honorable Paul T. Koenig and The Honorable Linda R. Feinberg of the Superior Court of New Jersey, Chancery Division-Family Part. She also served as a certified legal intern in the Mercer County Prosecutor's Office in Trenton, New Jersey and the Dauphin County District Attorney's Office in Harrisburg, Pennsylvania.

I’ve previously written blogs about “step-down” provisions often included in automobile insurance policies.   Such a provision is usually included in the “fine print” section of the policy.  It applies to injured claimants who are a named insured under another policy.  The step-down clause steps the available uninsured and underinsured motorist coverage down to the policy limits of the injured person’s own policy.  For example, if John Doe has a personal automobile insurance policy with uninsured/underinsured coverage in the amount of $15,000 but is injured in a car crash while driving a dump truck owned by his employer, he is limited to his own $15,000 policy if the offending driver is uninsured or also has a limited policy.  This is true even if John Doe is catastrophically injured and the dump truck carries $5,000,000 in coverage.  A step-down clause on the dump truck’s coverage will step down the available benefits to John Doe’s $15,000 policy. 

There are very few exceptions to the application of step down clauses.  I would like to share one that I recently came across.  My client was driving a truck insured by her employer for $500,000 in uninsured/underinsured motorist benefits.  My client was severely injured through no fault of her own and underwent shoulder and spine surgery as a result of the accident.  The negligent driver had a minimal liability policy with $15,000 in coverage.  My client had the same policy.   Once the $15,000 was turned over, we could not seek compensation from her personal policy because she had no more than $15,000 in coverage.  Accordingly, we made a claim under the employer’s underinsured motorist benefits.  The employer approved the settlement with the negligent driver and waived its subrogation rights against him.  Months later, the employer’s insurance company denied coverage based on a step down provision.  

I successfully opposed this denial based on a 2009 Appellate Division decision entitled Boritz v. NJM, 406 N.J. Super. 640 (App. Div. 2009).  There, the Court held that an insurance company cannot assert a step-down clause after it confirms the underinsured policy limits to plaintiff’s counsel and granted approval of the underlying settlement (“Longworth approval”) without advising the injured party of the potential set-off provided by the step-down provision.  In other words, once the company grants the requisite “Longworth approval” of the underlying settlement, permitting the injured person to give up the right to pursue the negligent driver personally, it is too late for the company to investigate coverage and assert the step-down clause.  

Denise Mariani is a Shareholder and member of Stark & Stark’s Lawrenceville, New Jersey office, specializing in Accident & Personal Injury Law. For more information, please contact Ms. Mariani.

I cannot stress enough the importance of knowing your listed “status” on your auto insurance policy.  Are you a “named insured” or are you listed as an “authorized driver”.

I was again reminded of the fact that most people are unaware of the limitations of their coverage. For example, I have a client who was very seriously injured as a pedestrian crossing the street to where her car was parked. Yes, “her car” is covered by car insurance. However, she is not the “named insured” on the policy. She is only listed as a “driver” on the policy. Therefore, she would only have medical coverage if she were actually operating the insured vehicle, not as a pedestrian walking toward the car.  

She was absolutely shocked to learn this. She and her fiancé live together but he is the “named insured” on the policy and she is listed as an authorized driver. She assumed she was fully covered by the policy since she is specifically named in the policy. If they were married, she would be covered as a “household family member”. However, they are not married so the only way to receive all the benefits of the policy, is to also be listed as a “named insured”.  

I firmly believe insurance agents should advise their customers of the limitations when a driver is not a named insured and not a “family member”. However, not all agents explain this so it is imperative that the consumer ask the questions and know what the difference is between being the “insured” and being listed as a “household driver”.

Denise Mariani is a member of Stark & Stark’s Lawrenceville, New Jersey office, specializing in Accident & Personal Injury Law. For more information, please contact Ms. Mariani.

Purchasing mobility equipment requires some research. I represent a client who has been wheelchair bound for many years. He is extremely independent and, as such, was looking to purchase a new motor vehicle. Obviously, he needed the vehicle to accommodate his wheelchair. He made a purchase based on the recommendation of a salesperson at a local mobility equipment dealer. The purchase included the mechanism necessary to lock in his wheelchair to the inside of the vehicle. When he received the wheelchair back from the dealer, the locking mechanism was installed.  

Later that day, he went into one of the rooms in his home. Unfortunately,  the locking mechanism on the bottom of the wheelchair got stuck on a floor vent and catapulted him out of the wheelchair.  He sustained serious injuries. He later learned that there must be at least a 3 inch clearance between the locking mechanism and the floor. The mobility equipment dealer took no measurements of the chair and the flooring details in my client’s home.

Hindsight tells us that you cannot always rely on salespeople for recommendations when purchasing mobility equipment. To ensure your safety, research all of the options available from multiple dealers. Also, insist on measurements of your particular chair and a full inspection of your home to make sure the equipment is safe at home, out in public and in your vehicle.

I recently read a court's decision interpreting a step-down provision of an insurance policy and realized that most consumers have no idea what a step-down provision is and how it impacts their family. A step-down provision limits claims under the uninsured and underinsured motorist benefits. The language of a step-down provision usually limits coverage to those who don't have their own separate policy. It most often comes into play when there are multiple car insurance policies in the same household.

For example, assume that a new driver (let’s call him Eddie) lives with his parents but has a separate policy of his own. Because Eddie is less than 25 years of age, putting him on Mom and Dad's policy would be extremely expensive. To cut down on the cost of driving, assume that Eddie buys a separate policy with only $25,000 in uninsured and underinsured motorist coverage. Let's assume that Eddie is in a car crash where the negligent driver let his insurance lapse so there is no liability coverage. In order to recover damages for his economic and non-economic expenses, Eddie has to make a claim under his own policy for uninsured motorist benefits. However, Eddie only has $25,000 in uninsured motorist coverage.

If that isn't enough, he can tap into Mom and Dad's policy, assuming they have more coverage. This is allowed UNLESS Mom and Dad have a STEP-DOWN clause on their car insurance policy. Because Eddie is a named insured on a separate policy, Mom and Dad's policy will step the coverage down to Eddie's limits.

The moral of the story is always ask questions of your insurance agent when purchasing insurance. Find out if the policy has a step-down clause and question how it will play out in a variety of circumstances. Also, get price quotes on having a separate policy for that new driver; the benefits of having everyone on one policy may outweigh the additional cost.

An Appellate Court Panel recently ruled that a church van is not considered an "automobile" for purposes of the New Jersey Law governing PIP (Personal Injury Protection). PIP benefits include payment of medical bills related to injuries sustained in an automobile accident. The PIP statute requires every standard automobile policy to carry such benefits for the named insured and family household members as well as passengers of the vehicle at the time of the accident. Commercial vehicles do not have to carry PIP benefits.  

Vans have always been considered "automobiles," however, this Appellate panel distinguished between a seven passenger minivan and a 15 passenger van with 5 rows of seating. The large van is not considered an "automobile" for purposes of the PIP statute and is not required to carry PIP benefits for its passengers. The "primary use" of the vehicle is also crucial. If the large van had been owned by a family and used primarily for personal use, PIP benefits may be available. However, in this case, the large van was owned by the church and its primary purpose was to transport church members. Clearly, the Court found, this van was a commercial vehicle and the passengers were not entitled to any PIP benefits from the van's policy or their own private automobile insurance.