Opinion ID: 2828535
Heading Depth: 3
Heading Rank: 3

Heading: In addition to the aforesaid coverages

Text: required to be provided in a basic automobile 13 insurance policy, optional liability insurance coverage insuring against loss resulting from liability imposed by law for bodily injury or death in an amount or limit of $10,000 . . . in any one accident. [N.J.S.A. 39:6A-3.1 (emphasis added).] As made clear by that statutory language, the basic policy, by default, does not provide for or mandate personal liability insurance like its “standard policy” counterpart. N.J.S.A. 39:6A-3.1(c). Nevertheless, the basic policy explicitly offers applicants the option of adding personal injury liability coverage in an amount up to $10,000. Ibid. Our appellate courts have interpreted the relevant statutory schemes to require $15,000/$30,000 coverage for innocent third parties, which they have deemed to be the mandatory minimum coverage provided under New Jersey law. Marotta, supra, 280 N.J. Super. 525; Varjabedian, supra, 391 N.J. Super. 253. In Marotta, an appellate panel reasoned that an injured third party “has the right to expect that all other drivers will be insured to the extent required by compulsory insurance.” Ibid. We affirmed that judgment “substantially for the reasons expressed in the opinion of the Appellate Division.” Marotta v. N.J. Auto. Full Ins. Underwriting Ass’n, 144 N.J. 325, 326 (1996). At the time Marotta was decided, however, AICRA had not yet been enacted and the only option for auto 14 insurance was the standard policy, which required every vehicle owner to have $15,000/$30,000 coverage. In a post-AICRA case, the Law Division ruled that AICRA’s basic policy, with its optional liability insurance, overrode the minimum compulsory insurance in New Jersey. Mannion v. Bell, 380 N.J. Super. 259, 260-61 (Law Div. 2005). Under that ruling, the court concluded that there was no longer any compulsory liability insurance. Ibid. In Varjabedian, supra, the Appellate Division overturned Mannion. 391 N.J. Super. at 260. The panel determined that the basic policy did not displace the compulsory $15,000/$30,000 coverage called for under the policy in issue. Ibid. On the issue of minimum liability coverage required to be provided under the rescinded standard policy with which the panel was grappling, the panel specifically noted: The alternative coverage provided by a basic policy under N.J.S.A. 39:6A-3.1 mandates no minimum amount of liability coverage. It only provides for optional liability coverage. The only mandated or compulsory minimum liability coverage limits in our statutes are the $15,000 per injury and $30,000 per accident, prescribed in both N.J.S.A. 39:6A-3 and N.J.S.A. 39:6B-1. Accordingly, a carrier seeking to retroactively void coverage based upon the prior conduct of its insured tortfeasor cannot rely on the alternative basic policy’s lack of mandated liability coverage to avoid providing the minimum compulsory non-cancelable $15,000/$30,000 liability limits. 15 [Id. at 260.] The Varjabedian panel thus concluded that, “[f]rom the perspective of the insurers’ obligation, the required compulsory insurance liability limits remain $15,000/$30,000.” Id. at 258.