INSURANCE FRAUD – NEW JERSEY SUPREME COURT UPDATES CARRIER RESPONSIBILITY
INSURANCE FRAUD – NEW JERSEY SUPREME COURT UPDATES CARRIER RESPONSIBILITY TO INNOCENT THIRD PARTIES WHEN AN APPLICANT FOR A “BASIC” POLICY COMMITS APPLICATION FRAUD
New Jersey’s courts have a history of protecting innocent third parties injured in accidents with drivers who have obtained their automobile insurance through fraud in their application. In the context of New Jersey’s compulsory automobile insurance requirements that history is reflected in New Jersey Manufacturers Insurance Co. v. Varjabedian, 391 N.J.Super. 253 (App.Div.) certif. denied. 192 N.J. 295 (2007). Applying Varjabedian, a policy voided due to the applicant’s fraud was molded to compel the defrauded insurance carrier to make $15,000 per person and $30,000 per accident coverage available to innocent third parties. Today the New Jersey Supreme Court, in a unanimous decision written by Justice Fernandez-Vina ruled that where New Jersey’s “basic policy” is concerned voiding such a policy for application fraud yields no more than the limit chosen for third party bodily injury coverage in the application – in this case the applicant elected the optional $10,000 personal liability coverage – rather than the $15,000 per person $30,000 per accident of the “standard policy”. The “basic policy” permitted by N.J.S.A. 39:6A-3.1 does not mandate personal liability insurance, if the optional personal liability limit is not elected no coverage will be made available to innocent third parties if such policies are voided. The link to the New Jersey Supreme Court’s opinion in Citizens United Reciprocal Exchange v. Sabrina A. Perez, et al; is http://www.judiciary.state.nj.us/opinions/supreme/A6713CUREvSabrina.pdf
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Our attorneys also represent insurance carriers in subrogation claims, helping you seek reimbursement from other insurers for costs you have incurred due to the wrongdoing of their insureds. To learn how we can help you, contact the Haddonfield insurance carrier attorneys online or call us in Haddonfield, New Jersey, at 856-795-2220.