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Plaintiff’s Underinsured Motorist Claim Barred Due to a Failure To Purchase a New Jersey Automobile Insurance Policy

By on September 16, 2022 in Coverage with 0 Comments

In 2016, the plaintiff Juan Guiterrez-Ganan was injured in an auto accident when his car was struck by a car driven by an underinsured motorist.  Plaintiff sued his automobile insurance company, defendant Allstate Insurance Company, to collect underinsured motorist benefits for his claimed injuries and losses from the automobile accident.  The issue in Guiterrez-Ganan v. Allstate Insurance Co., 2022 N.J. Super. Unpub. LEXIS 526 (App. Div. April 1, 2022), was whether plaintiff was precluded from collecting underinsured motorist benefits due to his failure to insure his vehicle in New Jersey, despite living in New Jersey for at least 1½ years before the accident.

The facts of the accident were not in dispute.  Plaintiff’s vehicle was rear ended while he was driving his vehicle and was struck in the rear by an intoxicated and underinsured driver.  He claims to have suffered personal injuries as a result of this collision.

Previously, he had lived in Georgia.  While in Georgia, he had registered his vehicle and obtained insurance coverage in Georgia from Allstate.  Thereafter, he moved to New Jersey but plaintiff continued to register his car in Georgia and continued to purchase a Georgia-issued automobile insurance policy from Allstate.  On his insurance application in 2016, plaintiff listed his address at a street in Savannah, Georgia.  However, at that time, plaintiff had a New Jersey driver’s license, listing his address in Galloway, New Jersey.  The plaintiff’s 2016 Georgia policy from Allstate did not include automobile medical payments or personal injury protection.

Plaintiff acknowledged that, as of the date of the accident in April 2016, he was a resident of New Jersey and maintained and garaged his car in New Jersey for at least 1½ years before the accident.

Initially, Allstate paid for some of plaintiff’s medical expenses but thereafter refused to pay additional monies.  In February 2019, plaintiff filed a lawsuit against Allstate, asserting a claim for underinsured motorist benefits.  Allstate successfully filed a motion for summary judgment, arguing that plaintiff’s underinsured motorist claim was barred due to his failure to register and insure his vehicle in New Jersey.

The Appellate Division noted that, pursuant to New Jersey statute, “every owner of an automobile principally garaged in New Jersey must maintain minimum liability insurance coverage, including no-fault PIP coverage at $15,000 per person.”  Further, it pointed out to determine whether an automobile is principally garaged in New Jersey, the key consideration was where the vehicle is kept most of the time.  Any driver moving to New Jersey must obtain a New Jersey driver’s license and register his or her car within sixty (60) days of becoming a resident.

Under the New Jersey statute, N.J.S.A. 39:6A-4.5, the law limits the ability of a person injured in a motor vehicle accident to sue persons responsible for their injuries.  Pursuant to this statute, any person who, at the time of the automobile accident, is required to but fails to maintain medical expense benefits coverage “shall have no cause of action for recovery of economic or non-economic loss sustained as a result of an accident while operating an uninsured automobile.”

The rationale for this statute is that “an injured, uninsured driver does not draw on the pool of accident-victim insurance funds to which he [or she] did not contribute.”  This statutory provision provides a “powerful incentive” for someone to obtain automobile liability insurance coverage or lose the right to sue for economic and non-economic injuries incurred in an automobile accident.

Thus, the Appellate Division found that despite the requirement under New Jersey law, the plaintiff failed to maintain medical expense benefits coverage.  Although that coverage was available to him in his Georgia policy, he elected not to pay for it.  Thus, the Court found under the plain language of N.J.S.A. 39:6A-4.5(a), the plaintiff was “barred from seeking recovery of economic or non-economic losses.”

Plaintiff made a further argument that this statutory provision should not apply to him because he was not operating an uninsured automobile at the time of the accident.  Because of the New Jersey Deemer Statute, “an automobile insurance company that sells insurance both in New Jersey and in other jurisdictions is deemed to have provided the minimum PIP coverage required by New Jersey law.” 

Plaintiff argued that by virtue of the Deemer Statute, his policy was “deemed” to include PIP benefits and, therefore, he was not uninsured.  The Court held that even if the Deemer Statute applied, plaintiff’s lawsuit was still barred because he failed to maintain PIP benefits as required by New Jersey law.  Hence, the Appellate Division upheld the trial court decision, dismissing plaintiff claims against Allstate for uninsured motorist benefits for both economic and non-economic losses stemming from his April 2016 automobile accident.



About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020-2023, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

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