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Huggins v. Aquilar; New Jersey Supreme Court reviews minimum auto liability limits and escape clauses
On April 21, 2021, the Supreme Court of New Jersey issued its opinion in Huggins v. Aquilar, No. 084200, 2021 WL 1555277, --- A.3d --- (N.J. Apr. 21, 2021). The Court affirmed the trial court’s decision to strike a provision in the garage policy issued by Federal Insurance Company (“Federal”) that fully eliminated coverage to permissive users of the car dealership’s vehicles that carried at least $15,000 in their own personal auto insurance. The Court explained that such “shifting of responsibility from owner to driver does not fulfill the public policy of the compulsory insurance requirement and its related permissive user doctrine.”
Two appeals pending before the New Jersey Supreme Court this year concern availability of automobile insurance coverage when the driver is insured under another insurance policy.
As a majority rule, the burden is on the insured to allocate between covered and uncovered claims. For example, when a judgment against an insured includes damages for which an insurer is liable and also damages beyond the coverage of the policy, the insured has the burden to establish (i.e. to allocate) which percentages of the verdict represent covered damages versus uncovered damages.
Communications and information exchanged between adjusters and in-house counsel for insurance companies present unique challenges for application of the work product protection, and the law is not uniform in this area. This article will explore the factors considered by courts in determining whether such communications and information are protected from disclosure to the insured and/or third-party claimant and the typical disputes that arise in both coverage and bad-faith litigation.