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[W] Skeete v. Dorvius6/6/2005
Argued January 4, 2005
The facts in this case are detailed in the decision of the Appellate Division, Skeete v. Dorvius, 368 N.J. Super. 311 (App. Div. 2004). We repeat only those that are necessary to our disposition. On June 5, 2000, Shedrack Skeete was injured when a car, owned and driven by Queenie Thomas, in which he was a passenger, was struck by a vehicle owned and operated by Chaisner Dorvius. Skeete, who had no automobile or auto policy of his own, and was not a member of a household with insurance coverage, sued Dorvius whose policy was insufficient to cover his injuries. He also sought Underinsured Motorist (UIM)coverage under Thomas's Prudential policy on which he was an "insured" by virtue of occupying Thomas's covered vehicle.
Thomas had purchased that policy in 1997, electing UM/UIM coverage of $100,000/$300,000. She was the "named insured" on the policy, the UM/UIM provision of which identified her, any relative living in her household and "anyone occupying a car covered under this part" as an "insured." That policy did not contain a step-down clause. Thus any "insured" presumably would have been entitled to the stated UM/UIM limits of $l00,000/300,000.
In 1999, Prudential changed the policy, in part, as a result of the Auto Insurance Cost Reduction Act of 1998 (AICRA) N.J.S.A. 39:6A-1.1. Among the changes was the characterization of parties in Skeete's position as "Additional Insureds." Under the new provision, the named insured was entitled to the $100/300,000 limit but Additional Insureds were entitled to only a $15,000/30,000 limit. The new policy stated:
Additional Insureds as described in this part are also covered, but only up to a limit of $15,000 per person/$30,000 per occurrence. Coverage is subject to the Uninsured and Underinsured Motor Vehicle definitions.
Limit of Coverage-Bodily Injury: Each Person
The amount shown on the declarations page under Uninsured Motorists Bodily Injury - Each Person is the maximum limit of liability for all damages, including damages for care or loss of services, arising out of Bodily Injury to one Insured injured as a result of any one accident. However, if you are an Additional Insured as defined under this part, the maximum liability for Each Person is $15,000.
The Appellate Division described in detail how Thomas was notified of the changes in the policy. Skeete, supra, 368 N.J. Super. at 314-17. In brief, on May 25, 1999, Thomas received two packages of material from Prudential. The first was an 83 page document reflecting the AICRA changes. The second contained another thirty pages.
Together the 113 pages in the two May 25 packages included a cover letter advising the insured to read the notices of change and a three page notice outlining the changes. Also included were a New Standard Auto Policy Booklet Parts 1, 2, 3, 4, a separate Part 5, a renewal declarations page, a bill, insurance identification cards, Notice of Policy Changes, PIP Pre-Certification Requirements, Endorsements PAC 4220 and PAC 236 and PCD 3523 standard coverage selection forms, a Buyer's Guide, and a Rating Information Form.
The declarations page of the new policy, included in the 83 page package, stated coverage, limits and premiums that did not reflect the step down:
Uninsured Motorists-Bodily Injury
Each Person $100,000
Each Accident $300,000
The UM/UIM premium was $21, a $2 reduction consistent with the notice that the policy was being re-rated as required by AICRA.
Endorsement PCD 3523 stated in relevant part:
[To the] Uninsured/Underinsured Motorists Coverage sectio
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