Yanoff, J.s.c. (retired and temporarily assigned on recall)
The opinion of the court was delivered by: Yanoff
Plaintiff Laura Carmody was a pedestrian who was struck on October 12, 1993, by an automobile while crossing the parking area of a service area of the Garden State Parkway where she had parked her car.
At that time she and her husband Michael were insured under a policy with defendant (Liberty Mutual Insurance Co. or Liberty), which provided them with $300,000 single limit liability coverage, but only the statutory minimum of uninsured motorists coverage (UIM) of $15,000 for each person and $30,000 for each accident.
The relationship between the Carmodys and Liberty began in 1981, when Laura Carmody telephoned an agent of Liberty Mutual by the name of James Barile and inquired with respect to securing an insurance policy. The uncontradicted evidence is that she requested a "$300,000 policy and whatever would go along with a $300,000 policy." At that time Barile did not discuss uninsured or underinsured motorist coverage with plaintiff.
Laura Carmody at trial testified that she did not know anything about such coverage and that it was not explained to her. The policy was renewed from year-to-year without change, except for substitution of a new automobile.
On one occasion she communicated with Barile's office to advise of a minor accident. The policy in controversy in this litigation became effective September 28, 1993, several weeks before the accident.
On another occasion Laura Carmody called Barile to ask whether she could secure an umbrella policy. At that time she was told that her policy limit of $300,000 was insufficient to warrant an umbrella policy. She was told nothing about her uninsured or underinsured motorist coverage.
It is uncontradicted that the Carmodys could have increased their UM/UIM coverage to $300,000 at a very small increase in premium.
When the New Jersey Automobile Insurance Freedom of Choice and Cost Containment Act of 1984 became effective, Liberty annually mailed to the Carmodys a Buyer's Guide and Coverage Selection form. Since the Carmodys were already insured by Liberty at the time of the enactment of the statute, the insured was not required to complete a coverage selection form, except to change their automobile insurance coverage.
Liberty concedes that it did not send to the Carmodys what is generally known as the "fair notice" provision of N.J.S.A. 17:28-1.9b:
the coverage selection form required pursuant to section 17 of P.L.1983, c. 362 (C.39:6A-23) shall contain an acknowledgement by the named insured that the limits available to him for uninsured motorist coverage and underinsured motorist coverage have been explained to him and a statement that no person ... shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage ....
Liberty explains this as an oversight.
Enclosed with the material sent to the Carmodys was the following:
New Jersey law requires that we send you the enclosed Coverage Selection Form with your renewal policy. You may use this Coverage Selection Form to select coverage options or limits that suit your insurance needs. We will endorse your policy to reflect any change in coverage options or limits that your select.
Please note that the Coverage Selection Form must be completed and signed by you should you, either now or in the future, wish to:
1) elect the "No Threshold" option;
2) change from the "No Threshold" option to the "Lawsuit ...