[Passed Both Houses]
ASSEMBLY, No. 2313
STATE OF NEW JERSEY
INTRODUCED SEPTEMBER 16, 1996
By Assemblymen GARCIA, GARRETT, Zecker and Blee
AN ACT concerning automobile insurance coverage for certain persons and amending P.L.1972, c.70.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 7 of P.L.1972, c.70 (C.39:6A-7) is amended to read as follows:
7. a. Insurers may exclude a person from benefits under section 4 and section 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) where such person's conduct contributed to his personal injuries or death occurred in any of the following ways:
(1) while committing a high misdemeanor or felony or seeking to avoid lawful apprehension or arrest by a police officer; or
(2) while acting with specific intent of causing injury or damage to himself or others.
b. An insurer may also exclude from section 4 and section 10 benefits any person having incurred injuries or death, who, at the time of the accident:
(1) was the owner or registrant of an automobile registered or principally garaged in this State that was being operated without personal injury protection coverage;
(2) was occupying or operating an automobile without the permission of the owner or other named insured[.];
(3) was a person other than the named insured or a member of the named insured's family residing in his household, if that person is entitled to coverage under section 4 or section 10 of P.L.1972, c.70 (C.39:6A-4 or 39:6A-10), or both, as a named insured or member of the named insured's family residing in his household under the terms of another policy; or
(4) was a member of the named insured's family residing in the named insured's household, if that person is entitled to coverage under section 4 or section 10 of P.L.1972, c.70 (C.39:6A-4 or 39:6A-10), or both, as a named insured under the terms of another policy.
(cf: P.L.1983, c.362, s.10)
2. This act shall take effect immediately.
This bill provides that insurers do not have to pay certain personal injury protection (PIP) benefits if the injured person already has PIP benefits coverage under another policy.
Pursuant to section 11 of P.L.1972, c.70 (C.39:6A-11), if two or more insurers are liable to pay PIP benefits, any insurer paying the benefits can recover from the other insurers an equitable pro-rata share of the benefits paid. This process is commonly referred to as "PIP contribution." Most insurers have recognized that PIP contributions, in most cases, result in a "wash," and accordingly, insurers have not generally exercised the contribution option. This bill eliminates PIP contributions and thereby eliminates an unnecessary expense in the current system without reducing coverage to the consumer.
Allows insurers to deny PIP benefits to persons with PIP coverage under another policy.