In a case involving a dispute over an insured’s coverage limits for personal injury protection benefits, the Appellate Division recently held that N.J.S.A. 17:28-1.9(a) immunized the carrier from an obligation to reform its policy to higher limits.  James v. State Farm, - N.J. Super. – (App. Div. 2019).

In James, plaintiff purchased an automobile policy from defendant, State Farm, listing his wife and son as additional insureds and claimed that he requested the maximum personal injury protection benefits of $250,000.00.  After his son and wife were involved in an auto accident, they discovered the State Farm policy provided only $15,000.00 in PIP coverage and designated a private health insurance provider as the primary for PIP benefits.

They filed a complaint seeking to reform the policy, but State Farm responded that it was immune from civil liability as a matter of law pursuant to 17:28-1.9(a) which immunizes insurers from damages actions on account of the election of coverage selected by an insured in the absence of willful, wanton or grossly negligent actions.

In order to obtain immunity under the statute, the insured must demonstrate that the named insured had at least the minimum coverage required by law, the insurer did not cause the insured’s alleged damages by willful, wanton or gross negligence, and the insurer complied with the coverage selection requirements of 17:28-1.9(b).

The court noted that State Farm had met all of the requirements for immunity under the Statute. 

It was undisputed that plaintiff had signed the coverage selection form containing a $15,000.00 on PIP coverage.  He also renewed the automobile policy multiple times over a two-year period without objection or modification.  The response plaintiff claimed that he told the State Farm agent he wanted higher limits and that the State Farm agent completed the coverage selection form after plaintiff had signed it.  While it was disputed what coverage plaintiff actually requested from State Farm, the Appellate Division held that plaintiff’s self-serving assertions were insufficient to overcome a summary judgment motion and State Farm had produced a completed coverage selection form, its insurance application page and the subsequent policy renewal documents issued from 2012 through 2014 and a certification showing plaintiff had requested $15,000.00 PIP coverage.

Finally, plaintiff argued that he was no “astute enough” to go through the document forms.  The Appellate Division rejected this argument noting that willful blindness is not a defense and insureds are under a duty to examine their insurance documents and to notify the insurer if there is a discrepancy between what they initially requested and what the insurer has actually provided.