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No PIP Coverage For You (Unlicensed Driver)

March 22, 2019

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<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2019/03/Norma-Blanco-Sanchez-v.-Personal-Service-Insurance-Company.pdf">Norma Blanco-Sanchez v. Personal Service Insurance Company</a></em><span></span>, the Superior Court of New Jersey Appellate Division recently held that an unlicensed driver who received permission to drive a car from its owner with knowledge the driver was unlicensed, may not recover personal injury protection (PIP) benefits under the New Jersey Automobile Reparation Reform Act, as a matter of public policy.  The appellate court affirmed the lower court holding that Personal Service Insurance Company did not owe coverage to the Plaintiff, Norma Blanco-Sanchez, for injuries sustained after an auto accident when she was moving her mother’s car to avoid a street sweeper.</p>
<p style="text-align: justify;">Specifically, the mother’s policy provided PIP coverage up to $15,000 in medical bills.  The policy defined “eligible injured person” as “the named insured or any relative of the named insured, if the named insured or relative sustains bodily injury as a result of any accident while occupying, using, entering into, or alighting from a private passenger auto.”  It further excluded from coverage “bodily injury of any person at the time of the accident . . . [who] [w]as operating or occupying a private passenger auto without the permission of the owner or other named insured.”  Personal Service Insurance argued it was impossible for an unlicensed driver like Blanco-Sanchez to receive permission to drive an auto.</p>
<p style="text-align: justify;">The trial court concluded that the insurer properly disclaimed coverage because “you can't give permission to extend the coverage in a situation where they couldn't have [gotten] coverage to begin with."  In affirming the decision, the Appellate Division, noted that “neither [her mother’s] permission nor defendant's issuing her a policy of insurance gave plaintiff an unlimited right to operate an automobile knowing that she was unlicensed and then to assert a first-party claim under defendant's policy.”  The court distinguished the public policy concerns present in third-party liability coverage from those present in PIP claims and held that “an owner cannot give permission to a driver who is known to be unlicensed.”</p>
<p style="text-align: justify;">Accordingly, this case offers some assurances to PIP insurers that they may not be on the hook for unlicensed drivers, as the New Jersey Appellate Division affirmed that such coverage would contravene public policy.</p>
Thanks to Douglas Giombarrese for his contribution to this post. Please email Colleen Hayes with any questions at <a href="mailto:chayes@wcmlaw.com">chayes@wcmlaw.com</a>

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