NEW JERSEY UIM RULING HAILED:

The Property Casualty Insurers Association of America, the American Insurance Association and other professional groups have lauded a decision by New Jersey Supreme Court ordering reversal of an appellate court decision and upholding a state law that bars the right of an uninsured motorist to sue for non-economic damages resulting from an injury from an automobile accident. The decision in the case of Caviglia v. Royal Tours of America, upheld the state law on due process grounds indicating that the statute does not implicate a fundamental right and that it is rationally related to, and suitably furthers, a legitimate state interest. It also found that the law did not violate the equal protection rights of uninsured drivers under the federal or state Constitutions, because uninsured drivers are not similarly situated to insured drivers since uninsured drivers are in violation of the law, and their counterparts are not. The decision is the second recent win for the industry in New Jersey courts. In Vassiliu v. Daimler Chrysler Corporation, et al the state’s Supreme Court rejected efforts to expand liability coverage by refusing to consider wrongful death and survivorship actions as separate actions under liability coverage, which would have triggered twice the coverage limits. Instead, the court upheld the contractual language and found all actions arising out of the death of one person to be one action for purposes of triggering coverage.