The opinion of the court was delivered by: Stein, J.
On certification to the Superior Court, Appellate Division, whose opinion is reported at 327 N.J. Super. 179 (2000).
This appeal concerns the scope of coverage provided by an uninsured/underinsured motorist endorsement of a business automobile insurance policy issued to a corporation. The specific issue is whether petitioner Robert Hurley (Hurley), the sole owner of Devil Eleven, Inc. (Devil Eleven), the named insured, is entitled to uninsured motorist (UM) benefits on the basis that the uninsured/underinsured endorsement of the policy expressly provides coverage for "any family member of the insured."
On December 12, 1993, Hurley was involved in a motor vehicle accident in Sacramento, California with an uninsured motorist. Progressive Cas. Ins. Co. v. Hurley, 327 N.J. Super. 179, 181 (App. Div. 2000). At the time of the accident, he resided in Sacramento, California where he played professional basketball with the Sacramento Kings. Id. at 181. Hurley was driving a Toyota 4 Runner loaned to him, presumably for promotional purposes, by the Folsom Lake Toyota dealership. Id. The 1994 Toyota 4 Runner was owned by Folsom Lake Toyota and Hurley received $60,000 in UM benefits under Folsom Lake's insurance policy. Ibid.
When Hurley started his professional basketball career prior to moving to California, he hired a financial advisor, Jason Jacobs, who was responsible for Hurley's personal business affairs, including insurance. In 1993, Devil Eleven, a New Jersey corporation, was formed on Jacobs' recommendation primarily for tax purposes. Hurley and his mother, Christine Hurley, were the sole officers of the corporation. When Devil Eleven was formed, Hurley owned a 1993 Ford Explorer. Jacobs requested that Jim Cullinan, the president and sole stockholder of Coverage Consultants, Inc. (Coverage Consultants), find the "best coverage available" for the 1993 Ford Explorer. The insurance application submitted to Coverage Consultants was a Commercial Trucker Application pursuant to the New Jersey Automobile Insurance Plan. The application stated that the applicant was Devil Eleven, the specified vehicle was the 1993 Ford Explorer and the named automobile operators were Robert M. Hurley and Christine Hurley. At the time the initial auto insurance policy was obtained, it was necessary for Coverage Consultants to procure automobile insurance through New Jersey's Commercial Automobile Insurance Plan (CAIP) because Hurley then was living in North Carolina, had a North Carolina driver's license, and his motor vehicle abstract revealed speeding and other moving violations. Id. at 182. We note that CAIP was established pursuant to N.J.S.A. 17:29D-1 "for the providing and apportionment of insurance coverage for applicants thereof who are in good faith entitled to, but are unable to procure the same, through the ordinary methods." Ibid.
Based on that application, Progressive Casualty Insurance Company, Inc. (Progressive) issued a Business Auto Insurance Policy and sent the policy directly to Devil Eleven. However, after the policy was mailed to Devil Eleven at the Hurley's home address, it was returned to Progressive as undeliverable. Progressive contacted Coverage Consultants, and Cullinan, Jr. requested that "c/o Hurley" be inserted next to the address in order that the policy would be delivered to Christine Hurley. The Declarations page of the 1993 Business Auto Insurance Policy, which was the policy in effect when the accident in California occurred, listed as the named insured "Devil Eleven, Inc." Under "ITEM FOUR," the vehicle listed as a covered auto is a "93 FORD EXPLORER 4 DOOR." "ITEM THREE" describes the symbols used to specify which autos are covered under the policy. The symbol "7" is defined as follows: "SPECIFICALLY DESCRIBED AUTOS. Only those autos described in ITEM FOUR for which a premium charge is shown (and for liability coverage any trailers you don't own while attached to any power unit described in ITEM FOUR)." The symbol "8" is defined as "HIRED AUTOS ONLY. Only those autos you lease, hire, rent or borrow. This does not include any auto you lease, hire or borrow from any of your employees or members of their households." Finally, the symbol "9" is defined as "NON-OWNED AUTOS ONLY. Only those autos you own, lease, hire or borrow which are used in connection with your business. This includes autos owned by your employees or members of their households but only while used in your business or your personal affairs."
Under "ITEM TWO - SCHEDULE OF COVERAGES AND COVERED AUTOS," the declarations page lists in the first column the "COVERAGES" and the second column refers to "COVERED AUTOS." Under "COVERAGES," the policy lists "UNINSURED MOTORISTS INSURANCE" and under the covered autos column, only the symbol "7" is designated.
Part I of the policy includes the following provisions:
PART I WORDS AND PHRASES WITH SPECIAL MEANING -- READ THEM CAREFULLY
A. "You" and "your" mean the person or organization shown as the named insured in ITEM ONE of the declarations.
F. "Insured" means any person or organization qualifying as an insured in the WHO IS INSURED section of the applicable insurance. Except with respect to our limit of liability, the insurance afforded applies separately to each insured who is seeking coverage or against whom a claim is made or suit is brought.
The UM endorsement is found several pages later with the heading, "THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY." The endorsement defines family member as "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child." Part D of the UM endorsement states as follows: "WHO IS INSURED. 1. You or any family member. 2. Anyone else occupying a covered auto or a temporary substitute for a covered auto." Jerome Iwler, litigation manager for the motor carrier division at Progressive explained in his deposition that that endorsement is an Insurance Service Organization endorsement, mandated by the New Jersey Automobile Insurance Plan. He further stated that because the named insured was Devil Eleven, no one would be entitled to coverage under part D, subsection 1 of the UM endorsement. In 1994, the business automobile insurance policy's UM endorsement issued by Progressive to Devil Eleven was amended. Specifically, the language in Part D of the UM endorsement was changed in 1994 to "WHO IS INSURED. 1. You. 2. If you are an individual, any family member." (Emphasis added).
After Hurley went to California to play for the Sacramento Kings, his agent, Michael Higgins, obtained a car for his use through a Toyota dealership. Christine informed Jacobs that Hurley would be using that car. Jacobs testified that when Hurley began using the 4 Runner in California, in or about October 1993, he called Cullinan, Jr. and told him that "there was another vehicle that [Hurley] would be driving and, therefore, to get coverage on that particular vehicle and to extend whatever coverage we had under the policies . . . ." Cullinan, Jr. testified that he told Jacobs that "if the car is not owned by Mr. Hurley it could not be added onto our policy." Cullinan, Jr. also informed Jacobs that he should make sure that "the car was insured properly by Folsom Toyota." Jacobs testified that he did not remember what Coverage Consultants told him in response to his request. Cullinan Jr. contacted Progressive and spoke to Ms. Jan Edbaugh, explaining the situation and asking for advice. Ms. Edbaugh recommended that Cullinan, Jr. add "hired car" coverage and "drive other car" coverage. After Cullinan, Jr. told Jacobs what Progressive had suggested, Jacobs requested that Cullinan, Jr. add the "drive other car" coverage. Cullinan, Jr. asserted that he told Jacobs that the coverage would be only for liability and that Jacobs authorized him to proceed. On October 21, 1993 Cullinan, Jr. sent a letter to Progressive that read as follows: "Please add hired-car coverage for liability on an ?if-any' basis, and "drive other car" coverage for $500,000 limit naming Robert M. Hurley and Christine A. Hurley." Iwler testified that a change was made to the policy whereby Robert Hurley and Christine Hurley were added as insureds under "drive other car" coverage. That the "drive other car" endorsement only enhanced the liability coverage and had no effect on UM coverage is undisputed.
Prior to the accident, Cullinan, Jr. never had any conversations with Jacobs or any of the Hurleys regarding UM coverage. Hurley testified at his deposition that, prior to the accident, he never saw the policy nor spoke with anyone from Coverage Consultants. Hurley also testified that Jacobs told him that "he had taken an insurance policy, as a blanket coverage for [him]self and the employees of Devil Eleven." Hurley understood that the policy was "to protect [him] in case if someone tried to sue [him] as a result of some kind of motor vehicle problem . . ." and that his financial advisor took out the policy "as blanket coverage for [him]self to protect [him]self and the employees of Devil Eleven. That's really all I knew about the policy." Progressive, supra, 327 N.J. Super. at 182.
With regard to Progressive's processing of the claims resulting from Hurley's accident, Iwler testified that the accident was reported on December 14, 1993. On January 21, 1994, Tom Bose, an adjuster from Progressive, sent a letter to Hurley notifying him that there were some first party coverages for the claim arising from his accident and indicating that there was liability coverage. Christine Hurley testified that after she received the January 21 letter, Jacobs must have contacted Progressive and inquired about UM coverage. Thereafter, Progressive instituted this action seeking a declaratory judgment that under Devil Eleven's commercial auto insurance policy Hurley was not entitled to UM coverage for the injuries he sustained in the automobile accident. Id. at 180-81. Hurley and Devil Eleven counterclaimed seeking UM coverage for those injuries, ibid., and also filed a third-party complaint against their broker, Coverage Consultants, contending that if the policy did not provide UM coverage it was attributable to the broker's negligence. Id. at 181 n.1. Coverage Consultants filed a fourth-party complaint against Jacobs. The third and fourth party complaints have been resolved. Ibid.
The Law Division granted summary judgment in favor of Progressive on the basis that Hurley was not entitled to UM coverage under a commercial auto insurance policy issued in New Jersey by Progressive, for injuries sustained while driving a loaned motor vehicle involved in an automobile accident with an uninsured motorist in California. The Appellate Division affirmed the trial court's grant of summary judgment, concluding that Progressive was not required to provide UM coverage pursuant to N.J.S.A. 17:28-1.1 for a borrowed car neither registered nor principally garaged in New Jersey, and that the declarations page of the policy plainly indicated that UM coverage was not provided. Id. at 181. The court specifically noted that item four of the "Declarations Page" made clear that only liability was covered under the "drive other car" category, and that no premium was charged and no coverage provided for UM, UIM or any other purpose with respect to the "drive other car" endorsement. Ibid. We granted certification. 163 N.J. 398 (2000).
New Jersey's courts have not yet addressed the specific issue of whether family oriented language in an auto insurance policy issued to a corporation renders the policy language ambiguous. Other jurisdictions, however, have confronted the question. The majority view among other jurisdictions is that business insurance policies extending coverage to family members are not ambiguous and therefore do not provide coverage for relatives or employees. For example, Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455 (Tex. 1997), held that the daughter of a corporation's sole shareholder was not entitled to insurance benefits under a commercial auto policy that stated that an insured included "you and any designated person and any family member of either" under the UM/UIM endorsement and "you or any family member" under the Personal Injury Protection (PIP) endorsement. Id. at 457. Similarly, American States Ins. Co. v. C & G Contracting, Inc., 924 P.2d 111 (Ariz. Ct. App. 1996) involved a policy in which the UIM endorsement provided that an insured included "you or any family member." Id. at 113. Noting that the Arizona Supreme Court has rejected the rule of construing ambiguous terms against the insurer, the court held that because a reasonably intelligent consumer should be aware that a corporation is a legal entity that can neither sustain bodily injury nor have a "family member," the business auto policy did not provide UM coverage to claimant. Id. at 114.
In Foote v. Royal Ins. Co. of Am., 962 P.2d 1004 (Haw. Ct. App. 1998), a policy's UM endorsement provided that an insured included "you or any ?family member.'" Id. at 1005. The court held that the claimant was not entitled to UIM coverage because the terms of the policy were unambiguous, noting that "although the use of a ?family member' clause in a commercial automobile policy is troublesome, common sense dictates that a reasonable layperson should know that a corporation cannot have a ?family member.'" Id. at 1007-08. Likewise, in Concrete Servs., Inc. v. U.S. Fidelity & Guar. Co., 498 S.E.2d 865 (S.C. 1998), the UIM endorsement defined "insured" as "[y]ou, and if you are an individual, any ?family member.'" Id. at 867. The court held that the claimant was not entitled to ...