September 20, 2007

Re:  New Auto Law in New Jersey

To The Companies In Interest

On September 10, 2007, New Jersey Governor, Jon Corzine, signed a new law providing that employees driving company vehicles are eligible for the company’s uninsured/underinsured motorist coverage. 

The new law, N.J.S.A. 17:28-1.1(f), provides that automobile policies issued to corporate or business entities “shall not provide less uninsured or underinsured motorist coverage for an individual employed by the corporate or business entity than the coverage provided to the named insured under the policy”.  This law automatically applies the corporate or business entity’s uninsured/underinsured policy limits to an employee, without regard to whether the employee has his or her own coverage or in what amount. This law goes into effect immediately and applies to all existing policies.

In essence, this law prohibits insurers’ use of “step down clauses” to bind employees to their personal automobile policy UM/UIM limits rather than the employer’s UM/UIM limits.

If you should have any questions or concerns, please do not hesitate to contact me at (856)751-5285.

Very truly yours,
Glendon E. Danks