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General Accident Group v. Shimp

Decided: January 20, 1977.


King, J.s.c.


This matter is presented to the court on a motion for summary judgment raising several distinct issues. On June 8, 1973 plaintiff's wife and child were killed as a result of injuries received in multi-vehicle accident on Interstate 295 in Greenwich Township, Gloucester County. An action was subsequently instituted seeking full no-fault benefits under a policy of insurance issued to plaintiff by the General Accident Group covering the automobile driven by plaintiff's wife and listing her as an insured. As part of that policy additional personal injury protection benefits were purchased by plaintiff in the amount indicated under option five. The plaintiff now seeks to recover the full amount of this additional personal injury protection endorsement as survivor benefits. This would include the following:

(a.) Maximum essential services benefits equalling $14,600.

(b.) The $10,000 added death benefit as a result of the death of plaintiff's wife.

(c.) The $1,000 funeral expense benefit as the result of the death of plaintiff's wife.

(d.) The $1,000 added funeral expense benefit as the result of the death of plaintiff's son.

Defendant carrier contends that the $4,380 for essential services already paid to the estate represents the survivor benefits payable under N.J.S.A. 39:6A-4(d) of the act with relation back to N.J.S.A. 39:6A-4(c). $4,380 is the amount payable under the basic endorsement and the statute when no additional options are purchased.

Plaintiff also filed a demand for arbitration against the defendant under the uninsured motorist provisions of the policy referred to above. This demand for arbitration was subsequently

amended to include the uninsured motorist coverage under an additional policy of insurance allegedly covering plaintiff at the time of the accident. It is the estate's contention that the coverage available to pay any award issued as a result of the pending arbitration proceedings should be the total of the two policies, and they so urge the court to hold as a matter of law.

Finally, a separate action was instituted in the matter by General Accident Group against plaintiff and the American Arbitration Association seeking a declaration that section three of the New Jersey basic personal injury protection endorsement is not violative of public policy. Section 3 of the endorsement provides for a reduction of any amount payable for economic loss under uninsured motorist coverage to the extent of personal injury protection (hereinafter PIP) benefits paid. It is the contention of the estate that any set-off of PIP benefits against the uninsured motorist coverage should be a set-off from the total amount of damages and not from the coverage. This suit has been consolidated with the suit instituted by plaintiff Shimp as there are overlapping issues of fact and law, and plaintiffs also move for summary judgment on this issue.

The court will first deal with those issues concerning the availability of maximum option 5 benefits as survivor benefits and will then discuss the issues of uninsured motorist coverage and its relationship with PIP benefits.


Although the terms of an insurance policy may also be considered in resolution of a dispute, the relevant statutory provisions control a contract of insurance. Maros v. Transamerica Ins. Co. , 143 N.J. Super. 307 (Law Div. 1976); see also, Peraglia v. Jones , 120 N.J. Super. 518 (App. Div. 1972). The relevant parts of N.J.S.A. 39:6A-4 (the New Jersey Automobile Reparation Reform Act, hereinafter act) provide:

Personal injury protection coverage, regardless of fault

Every automobile liability insurance policy insuring an automobile as defined in this act against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of ownership, operation, maintenance or use of an automobile shall provide additional coverage, as defined herein below, under provisions approved by the Commissioner of Insurance, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an accident involving an automobile, to other persons sustaining bodily injury while occupying the automobile of the named insured or while using such automobile with the permission of the named insured and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from such automobile. "Additional coverage" means and includes:

c. Essential services benefits.

Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of $12.00 per day. Such benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of $4,380.00, on account of injury to any one person in any one accident.

d. Survivor benefits

In the event of the death of an income producer as a result of injuries sustained in an accident entitling such person to benefits under section 4 of this act, the maximum amount of benefits which could have been paid to the income producer, but for his death, under section 4 b, shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in ...

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