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Werts v. New Jersey Manufacturers Insurance Co.

Decided: September 5, 1991.


On appeal from the Superior Court, Law Division, Gloucester County.

Long and R.s. Cohen. The opinion of the court was delivered by Long, J.A.D.


In 1981, defendant New Jersey Manufacturers Insurance Company issued an automobile insurance policy to Mary Werts which was renewed yearly thereafter. In 1984, Werts was involved in a single-car accident which left her permanently disabled. She received basic income continuation benefits pursuant to N.J.S.A. 39:6A-4b and opted for added income continuation benefits of $175 per week up to a limit of $18,200. When this limit was reached and defendant refused further payment, Werts instituted this action for reformation of the insurance contract to include income continuation benefits "for so long as the disability may persist" and for recovery of all unpaid benefits, on the ground that defendant never offered her the coverage required under the New Jersey Automobile Reparation Reform Act (No-Fault Law or the Act) (N.J.S.A. 39:6A-10) and the regulation promulgated thereunder (N.J.A.C. 11:3-7.3).

In response, defendant claimed to have fulfilled all of its statutory, regulatory and contractual obligations to plaintiff. Defendant moved for summary judgment on the issue of income continuation benefits which motion was granted. This appeal by Werts followed. We have carefully reviewed this record in light of Werts's contentions and have concluded that defendant's motion for summary judgment was properly granted. We affirm.

In 1973, the No-Fault Law came into effect. The statute provided in relevant part that:

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 automobile accident, 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:

b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00, per week. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person, in any one accident. [ L. 1972, c. 70, § 4].*fn1

In another section, the statute provided:

Additional personal injury protection coverage. Insurers shall make available to the named insured covered under section 4, suitable additional first-party coverage for income continuation benefits, essential services benefits, survivor benefits and funeral expense benefits. Income continuation in excess of that provided for in section 4 must be provided as an option by insurers to persons for disabilities, as long as the disability persists, but not beyond age 65, up to

an income level of $35,000.00 per year, with the excess between $5,200.00 and the amount of coverage contracted for to be written on the basis of 75% of said difference. The Commissioner of Insurance is hereby authorized and empowered to establish, by rule or regulations, the amounts and terms of income continuation insurance to be provided pursuant to this section. [ L. 1972, c. 70, § 10].*fn2

In response to the Legislature's mandate, the Commissioner promulgated N.J.A.C. 11:3-7.3 which prescribed:

(a) Appendix A outlines the minimum schedule of "additional personal injury protection" coverage benefits that insurers must make available in accordance with Section 10 of the Act.

(b) In the Appendix A table, only five weekly indemnity schedules are shown, with a two-year benefit duration. It is believed that these ranges of benefits will meet the demand for this additional coverage in most cases.

(c) Consequently, at least for the initial period, it will be sufficient if your manuals exhibit these minimum benefit schedules with corresponding rates.

(d) However, benefits in excess of those set forth in Appendix A must be made available at the option of the named insured at reasonable intervals subject to the specific approval by the Commissioner, up to a maximum additional weekly loss of income benefit of $35,000 per year, as well as reasonable essential service benefits, survivor benefits and funeral expense benefits, as required by Section 10 of the Act. [4 N.J.R. 270 (Nov. 9, 1972)].

The following is the Appendix referred to in the rule:


Additional Personal Injury Protection

Maximum Additional Weekly Maximum Additional

Loss of Income Benefit Essential Services

During After Total During After Total Death

Period of Period of Maximum Basic Basic Max. Benefits

Basic Basic Income Payments Payments E. Serv (c)

Benefits Benefits Benefits

Payments Payments

(a ) (b)

1. $0 $100 $5,200 $0 $12 $4,380 $10,000

2. 25 125 7,800 8 20 10,220 10,000

3. 75 175 13,000 8 20 10,220 10,000

4. 150 250 20,800 8 20 10,220 10,000

5. 300 400 36,400 8 20 10,220 10,000


(a) Subject to 75 percent of the amount of weekly income in excess of $100.00 per week.

(b) Subject to 75 percent of the total weekly income.

(c) Death benefit shall be payable provided death occurs within 90 days ...

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