Attempt to Save Premium is Costly to Insured: Living in New Jersey but Insured in Florida is Fraud.

• Author: Zalma, Barry
• Position: [ON MY RADAR]

* No one like to pay insurance premiums. However, in a state like New Jersey, insuring a vehicle with No Fault insurance is mandatory. Since insurance in Florida is less expensive than in New Jersey a resident of New Jersey was tempted to and, in fact, insured his vehicle in Florida to save money on premium charges.

In Jeffrey E. Scholes v. Stephen M. Hausmann, And Kimberly A. Logan, Docket NO. A-0980-17T3, Superior Court Of New Jersey Appellate Division (October 16, 2018) the plaintiff appealed from an order granting summary judgment to defendant Stephen M. Hausmann ("defendant") and dismissing the complaint based on the court's finding that plaintiff was uninsured within the meaning of N.J.S.A. 39:A-4.5(a), and thereby barred from recovering damages for economic and non-economic losses.

FACTS

On October 23, 2014, plaintiff and defendant were involved in an automobile accident in South Orange and plaintiff suffered injuries. The vehicle he was driving was titled and registered in his name using a friend's address in Florida, despite plaintiff living and working in New Jersey for approximately five years. He failed to obtain a New Jersey driver's license or to register his vehicle in New Jersey.

Plaintiff acknowledged that his vehicle was principally garaged in New Jersey. The judge found that plaintiff "provided false information to the State of Florida as to his residency." At his deposition, plaintiff testified he continued to maintain his "Florida automobile insurance because... Florida insurance was less expensive than new jersey insurance." (emphasis added)

As a result of his injuries, plaintiff applied for personal injury protection ("PIP") benefits through his Florida Geico automobile insurance policy. The Florida policy was not approved by the New Jersey Commissioner of Banking and Insurance, and it only provided $10,000 per person in medical benefits coverage.

Defendant moved for summary judgment, arguing N.J.S.A. 39:6A-4.5(a) barred plaintiff's claims because the Commissioner did not approve his insurance policy and therefore, he was uninsured under the statute. Based upon plaintiff's misrepresentations, defendant also argued that insurance fraud was committed pursuant to N.J.S.A. 2G21-54.6, which was enacted to prevent reverse rate evasion.

DISCUSSION

Every owner of an automobile principally garaged in New Jersey must maintain automobile liability insurance coverage under provisions approved by the Commissioner, including...