Court Opinion

ID: 9636683
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:39:04.628994+00
Date Added: 2024-06-11T18:04:55.929946
License: Public Domain

Justice LONG
delivered the opinion of the Court.
The facts in this case are detailed in the decision of the Appellate Division, Skeete v. Dorvius, 368 N.J.Super. 311, 845 A.2d 1265 (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 $100,-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. *739:6A-1.1. Among the changes was the characterization of parties in Skeete’s position as “Additional Insureds.” Under the new provision, the named insured1 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, 845 A.2d 1265. 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
*8The 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 section of your policy we have added a clause which serves to limit the amount recoverable under these coverages to $15,000 per person, $30,000 per occurrence for persons who are not named insureds or resident relatives, but who are injured while passengers in your
In addition to the 113 pages Thomas received on May 25, on June 9,1999, Prudential sent her another package of 78 pages re-rating her policy in accordance with AICRA. The June 9 package included the New Standard Automobile Policy booklets, an amended declarations page and Important Notice to New Jersey Policyholders, highlighting policy changes. The amended declaration page again listed the coverage for Uninsured Motorists as $100,000 for each person and $300,000 for each accident with no notation about the step-down in coverage.
When faced with the question of the sufficiency of Prudentials notice of the step-down, the Appellate Division concluded:
We have considered the extensive record before us in light of the applicable law, and we are satisfied that the manner in which Prudential notified Thomas of the change in UM/UIM coverage — inundating her with almost 200 pages of documents in a two-week period, burying the change in a few unremarkable paragraphs, and failing to note the change on the declaration page — was inadequate for the average policyholder to determine that the UM/UIM coverage was amended and how the amendment would affect the policyholder.
In reviewing the documents provided to Thomas, we are persuaded that the policyholder would reasonably expect that the coverage shown on the declaration page remained the same as the previous year. It is unlikely that the average policyholder would have identified the step-down in UM/UIM coverage without extensive detective work, an unreasonable encumbrance on a policyholder that can only result in hidden pitfalls such as are presented here.
We hold that unless specific changes in the limits of coverage are noted on the declaration page, the carrier’s notice of changes in coverage is inadequate.
*9The Court went on to reverse the summary judgment entered in Prudential’s favor.
We granted Prudential’s petition for certification Skeete v. Dorvius, 180 N.J. 456, 852 A.2d 192 (2004), and now affirm. Prudential reiterates the essential argument that it advanced before the Appellate Division — that its efforts to notify Queenie Thomas of the changes in her policy were adequate. We disagree. Substantially for the reasons expressed by the Appellate Division, we have concluded that the notice of the addition of the step-down was insufficient because of its presentation as part of an essentially undifferentiated passel of two hundred documents. It is the placement of the notice and not its specificity that is the issue.
We add this caveat. We are not prepared to say that every single policy change must be reflected on the declarations sheet. That simply may not be practical in every situation as this case, which involves a large scale statutory overhaul, demonstrates. Thus, for example, had the insurer sent the cover letter with the three page notice outlining the changes separately, thus giving the insured a chance to digest the changes before drowning her in a sea of paper, the outcome might well have been different. In sum, we hold that policy changes must be conveyed fairly to the policyholder, although in no particular form, and that in this case the insurer fell short.
The judgment of the Appellate Division is affirmed.

 Separate provisions governing resident relatives were also included.