This is a declaratory judgment action in which plaintiff Allstate Insurance Company (hereinafter Allstate) seeks a declaration of the limits of its liability under an uninsured motorist endorsement.
The facts are as follows:
On August 17, 1970 Frank McHugh was injured in an automobile accident with an uninsured motorist while operating a motor vehicle insured by Allstate under their Allstate "Crusader Policy," which policy was issued to his wife, Clare Q. McHugh. The policy covered a 1968 Ford Falcon and a 1966 Volkswagen. Two declaration sheets were issued by Allstate, both bearing the same policy number. One sheet bears on its face "ITEM 1 68 FALCON." The second sheet bears on its face "ITEM 2 66 VOLKSWAGEN." Both declaration sheets provide uninsured motorist coverage for bodily injury for $10,000 for each person and $20,000 for each accident. Separate premiums of $5 were paid for the uninsured motorist coverage (Coverage S).
The policy of insurance and Coverage S included therein conformed to N.J.S.A. 17:28-1.1.
It has been conceded for purposes of this proceeding that the injuries sustained by McHugh will justify an award in excess of $10,000.
McHugh contends that since separate but equal premiums were paid for Coverage S (uninsured motorist coverage) for each automobile in the same amount of $5, double coverage should be afforded to the insured, thereby making $20,000 rather than $10,000 the policy limit. He further argues that this type of insurance follows the individual rather than the vehicle and, therefore, if a premium is collected
for separate cars, the insureds under the policy are entitled to double coverage.
There is, however, increased risk incurred by the carrier when insuring separate motor vehicles under Coverage S. It is true that the named assured is covered under Coverage S regardless of the circumstances under which he is injured by an uninsured motorist. He has this coverage whether one, two or more vehicles are covered. Coverage S extends not only to the individual assured but also extends coverage to the vehicle under this situation.
Coverage S provides "the company will pay all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured vehicle * * *."
Persons insured are defined as "(b) any person while occupying an insured highway vehicle."
It is conceivable that Frank McHugh could be operating one vehicle with multiple passengers therein, his wife operating the second vehicle with multiple passengers therein. All the passengers in both vehicles are covered under Coverage S. This increased risk provides sufficient consideration and justification for ...