When you are involved in an automobile accident it is important to have an attorney who understands this complex area of law. For instance, what are the insurance liability issues if you are a New Jersey resident, injured by an out-of-state driver in New Jersey?
The Deemer Statute imposes on all insurance carriers that transact or are authorized to write automobile business in New Jersey the obligation to include a provision that their policies will provide coverage at least equal to the “standard” New Jersey policy minimums whenever the insured vehicle is used or operated in this state. New Jersey’s Deemer Statute is intended to ensure that New Jersey residents injured by out-of-state vehicles have recourse to policies of insurance that provide coverage at least as broad as a New Jersey Policy. Thus, when an insurer does business in New Jersey (or is authorized to do business in New Jersey) the Deemer Statute, N.J.S. 17:28-1.4, eliminates the choice of law analysis. Instead, there is a full cause of action for an out-of-state insured injured in a New Jersey automobile accident for the full benefits provided by New Jersey law. Adams v. Keystone Ins. Co., 264 N.J. Super 367 (App. Div. 1993) See also Hamilton v. Gov. Employees Ins. Co., 283 N.J. Super. 42, 429-430 (App. Div.) certif. granted 142 N.J. 573 (1995), D’Orio v. West Jersey Health Systems, 797 F. Supp. 371 (D.N.J. 1992)
The statute itself creates three categories of Deemer coverage:
- A. Policy is sold in any other state or Canada by an insurance carrier that is authorized to sell automobile insurance in New Jersey; Policy is deemed to include liability, uninsured motorist, and PIP coverage to the same extent as a New Jersey “standard” policy.
- B. Policy is sold in any other state or Canada by an insurance carrier that is not itself authorized to sell automobile insurance in New Jersey, but that is legally affiliated with a company that is legally affiliated with a company that is authorized to write automobile insurance in New Jersey. Policy is deemed to include liability, uninsured motorist, and PIP coverage to the same extent as a New Jersey “standard” policy.
- C. Policy is sole in any other state or in Canada by an insurer that is not itself authorized to sell automobile insurance in New Jersey but that is legally affiliated with a company that is not itself authorized to sell automobile insurance in New Jersey, but that is legally affiliated with a company that is authorized to write non-motor-vehicle related insurance in New Jersey. Policy is deemed to include PIP coverage for New Jersey residents who neither have, nor are required to have, PIP coverage.
Where the Deemer Statute does not apply, i.e. out-of-state insureds whose insurance carrier does not do business in New Jersey, or for New Jersey insureds injured in accidents outside of New Jersey, an ordinary choice of law analysis must be used. Absent a “Deemer Statute” one must do a “choice of law” analysis. Under a “choice of law” analysis an automobile policy is a contract that is generally governed by the laws of the state where the car is registered and garaged.
The analysis for a New Jersey Choice of Law case was explained by the Supreme Court in State Farm, etc. Ins. Co. v. Simmons’ Estate, 84 N.J. 28 (1980) aff’g 169 N.J. Super. 133 (App. Div. 1979). This case was decided prior to the Deemer Statute but the choice of law analysis still applies today:
“[New Jersey’s approach to choice of law questions] calls for recognition of the rule that the law of the place of the contract ordinarily governs the choice of law because this rule will generally comport with the reasonable expectations of the parties…At the same time, this choice of law rule should not be given controlling or dispositive effect. It should not be applied without a full comparison of the significant relationship of each state with the parties and the transaction. That assessment should encompass an evaluation of important state contacts as well as a consideration of the state policies affected by, and governmental interest in, the outcome of the controversy…
[I]n an action involving the interpretation of an automobile liability insurance contract, the law of the place of the contract will govern the determination of the rights and liabilities of the parties under the insurance policy. This rule is to be applied unless the dominant and significant relationship of another state to the parties and the underlying issue dictates that this basic rule should yield.”