This decision tips the balance of power back to the consumer and allows for efficient and expedient resolution of UM/UIM claims.
Marlton, NJ (PRWEB) December 18, 2012
A recent decision issued by the New Jersey Appellate Court (A-4870-09T2) will have an immense impact in favor of auto insurance policyholders throughout the state. The decision, now published case law, essentially prevents insurance companies from aggressively litigating arbitration awards when the amount they are responsible for is less than $15,000 even if the gross arbitration award exceeds that amount. State law already specified that an arbitration award was binding if the amount the insurance company was to pay was less than $15,000. In Badiali v. New Jersey Manufacturers Insurance Group (A-2795-11T3), the dispute was the result of an uninsured motorist claim arbitration award that the insurance company (NJM) was refusing to pay to their policyholder (Badiali). NJM spent approximately $30,000 fighting an arbitration award in favor of plaintiff and against NJM in the amount of $14,574.
The dispute stemmed from the fact that the total arbitration award was just over $29,000, but NJM was only responsible for half of that amount. Despite NJM’s legal responsibility being less than the $15,000, they chose to fight the award anyway on the basis that the gross award exceeded the $15,000 cap.
Richard J. Hollawell, a partner at the firm, argued the case before NJ Appellate Division Judges Fisher, Alvarez, and Waugh. The court agreed that an insurance company cannot drag a plaintiff through an extended court proceeding over an arbitration award in plaintiff’s favor, if the net amount awarded is less than $15,000.
“This is a clear win for consumers in New Jersey,” Hollawell said. “The court made it clear that the law in New Jersey is that an insurance company for UM/UIM cannot reject an arbitration award when their legal responsibility to pay is less than $15,000 regardless of the gross amount of the award.”
The issue stemmed from the fact that the arbitration award was for $29,148.62 of which NJM was only responsible for half. NJM argued that because the gross amount exceeded $15,000, it was not binding, whereas Hollawell maintained that the gross amount cannot be used as an excuse to not pay the award because they were only liable for half the total amount awarded.
“This now ends any doubt about an insurance company’s consideration of a gross award over what its legal responsibility is in regards to that gross award,” Hollawell explained. “This decision is a victory for New Jersey policy holders because it prevents an insurance company from forcing them to litigate a UM/UIM claim when the amount in dispute does not exceed $15,000.”
Richard P. Console, Jr., managing partner at the firm, asserted that this decision closes a gap in the law that allowed insurance companies to abuse their power. Console expressed that the fact that NJM spent approximately $30,000 in legal fees to fight this clear obligation under the law to pay a UM award of $14,574 shows just how far the playing field has tilted in favor of the insurance companies against claimants. He, along with Hollawell, hopes that this decision will start to tip that balance back in consumers’ favor.
“This decision tips the balance of power back to the consumer and allows for efficient and expedient resolution of UM/UIM claims,” he said. “We are very satisfied with the effect this decision will have on future cases where the insurance company is trying to duck their legal obligations.”
The attorneys at Console & Hollawell, P.C. have been protecting the rights of car accident victims throughout New Jersey since 1994. Their dedicated lawyers have experience working in the insurance industry and this has given them valuable insight into how these companies operate as well as how to overcome their underhanded tactics, much to the benefit of their clients.