Both the Property Casualty Insurers Association of America (PCI) and the American Insurance Association issued bulletins giving a thumb’s up to the New Jersey’s Supreme Court’s unanimous decision in the case of Vassiliu v. Daimler Chrysler, Prudential and others, which supported the industry’s views that wrongful death and survival actions do not trigger separate “per person” coverage claims under an automobile liability insurance policy.
The decision reversed an Appellate Division holding that a plaintiff’s wrongful death and survivor claims constitute separate bodily injuries under the policy, which would have entitled the plaintiff to separate bodily injury coverage for each injury alleged.
The AIA called it an “historic decision,” which will ultimately benefit the state’s consumers. The ruling “prevents a significant expansion of the exposure assumed by insurers on every personal automobile insurance policy issued in New Jersey, which priced such coverage out of reach of the insurance consumer,” said the AIA. It “effectively closes the floodgates of litigation and also dramatically decreases the exposure of all personal automobile insurers doing business in the state at a time of real concern over the stability of New Jersey’s automobile insurance marketplace.”
The PCI noted that the decision had held that because “Vassiliu’s survival and wrongful death actions are derivative of and dependent on the decedent’s injuries, including his death, those actions are subject to a single ‘per person’ limit in the Prudential liability policy as well as the two underinsured motorist policies. In addition, the UIM carriers are entitled to a credit for the amount received from the products liability settlement.”
Several insurance trade associations, including the PCI (then the NAII) and the AIA, joined together to file an amicus brief asking the New Jersey Supreme Court to reverse the appellate court’s ruling.
The PCI described the facts of the case as follows: “In the original case of Vassiliu v. Daimler Chrysler Corporation, the wife of a man killed in an auto accident sued several defendants. The Superior Court determined the at-fault driver was 100 percent liable and granted total damages and prejudgment interest award of more than $2 million. The plaintiff later filed an UIM claim against the at-fault driver, requiring two insurers to pay from their respective UIM policies. The insurers appealed, arguing that the trial court erred in ordering separate policy limits for the wrongful death claims and the survivor claim. The appellate court concluded that the estate and the decedent’s heirs were each a separate ‘person’ injured by the accident, despite the fact that the victim was the sole individual who suffered bodily injuries from the accident.”
“We hail the Supreme Court’s decision because it recognized the plain language and clear limits of the insurance contract at issue and it recognized the intent of New Jersey law, which states that wrongful death and survival actions are derivative of the single bodily injury of the victim,” stated Richard Stokes, PCI counsel and regional manager. “The appellate court ruling would have significantly expanded insurers’ liability. Most importantly, this case helps hold down costs for policyholders.”
“This will help our continuing effort to make insurance more affordable and available in New Jersey,” stated David Snyder, AIA vice president and assistant general counsel. “Additionally, this assures that New Jersey will be in the mainstream on these issues and will not allow unexpected windfalls for a few,” he continued.
“The Court also applied a commonsense approach to interpreting insurance contracts. The language was clear in this case, and the Court appropriately found no ambiguity. This provides an important element of predictability that will benefit the insurance market,” Snyder concluded.
A copy of the N.J. Supreme Court’s decision can be found at http://www.judiciary.state.nj.us/opinions/supreme/a-63-02.pdf