Automobiles: N.J.S.A. 39:6A-3.2 requires that all automobile insurance policies include the covereages required by N.J.S.A. 39:6A-4, which includes PIP coverage. The term "automobile" is defined in N.J.S.A. 39:6A-2 as follows:
a. "Automobile" means a private passenger automobile of a private passenger or station wagon type that is owned or hired and is neither used as a public or livery conveyance for passengers nor rented to others with a driver; and a motor vehicle with a pickup body, a delivery sedan, a van, or a panel truck or a camper type vehicle used for recreational purposes owned by an individual or by husband and wife who are residents of the same household, not customarily used in the occupation, profession or business of the insured other than farming or ranching. An automobile owned by a farm family copartnership or corporation, which is principally garaged on a farm or ranch and otherwise meets the definitions contained in this section, shall be considered a private passenger automobile owned by two or more relatives resident in the same household.
Under this statute, two types of vehicles are "automobiles" required to have PIP (three if you include farm vehicles):
Private passenger automobiles (this includes minivans and SUVs, see below) as long as they are not used as a taxi or rented with a driver.
Pickup trucks, vans (which means large vans used for cargo or large numbers of people and therefore typically used by business rather than families), etc. only if they are used for recreational purposes and owned by an individual or husband an wife and are not generally used for the insured's business (other than farm work).
In New Jersey Manufacturers Ins. Co. v. Hardy, 178 N.J. 327, 335, 840 A.2d 231 (2004), the New Jersey Supreme Court noted that the definition of "automobile", "focuses first on the type of vehicle and then examines its use." Take, for instance, a sedan used exclusively for delivering pizzas. This would be a "private passenger automobile of a private passenger or station wagon type" and therefore fall under category #1. Since the vehicle was not being used as a taxi or the like, it would qualify as an "automobile," even though it is used commercially. On the other hand, if a pickup truck were used for delivering pizzas, it would be a "a motor vehicle with a pickup body" (category #2) and would not qualify for the definition of "automobile" because it is "customarily used in the occupation, profession or business of the insured." The pizza delivery pickup truck would not require PIP, and would be subject to recovery of PIP. This example makes it clear that speaking of a "commercial vehicle exception" is a gross over-simplification.
Note that in determining whether a private passenger vehicle is a livery or rented with a driver, we look at the general use of the vehicle, not its specific use at the time of the accident. Bello v. Hurley Limousines, 249 N.J. Super. 31, 37 (App. Div. 1991). However, an intersting question arises in the case of vehicles used for such services as Uber and Lyft. Do these vehicles cease to be "automobile"s because they are now used as a livery? Does it matter how often the vehicle is used to transport passengers under these services versus how often it is used personally? In "The Uber Threshold," 219 N.J.L.J. 475, S12; S15, Michael B. Fusco suggests that such a vehicle would cease to be an "automobile" while it is using one of these services, either from the time that the vehicle is "available" or from the time that the the driver picks up the passenger. Although this analysis seems to be at odds with the Bello decision, there is a reasonable argument that this new type of vehicle service requires the "case by case analysis" that Bello rejected for a classical taxi in 1991. We anticipate that this issue will be decided by the courts in the future.
Obviously, it will be important to determine whether a vehicle is a "private passenger automobile of a private passenger or station wagon type" (category #1, in which case it requires PIP unless it is a taxi or the like) or a "motor vehicle with a pickup body, a delivery sedan, a van, or a panel truck or a camper type vehicle" (category #2, in which case it only requires PIP if it is not customarily used in business). Here are some cases that clarify this distinction:
New Jersey Manufacturers Ins. Co. v. Hardy, 178 N.J. 327, 335, 840 A.2d 231 (2004): Police cruiser a "private passenger vehicle" and an "automobile." Officer's own PIP coverage was required to provide PIP coverage for the accident.
Giordano v. Allstate Ins. Co., 260 N.J. Super. 329 (App.Div. 1992): Minivan used as a car dealership's demonstration vehicle is a private passenger vehicle required to carry PIP. Note that this case is particularly counter-intuitive since the statute refers to "vans" in category 2. However, the courts understand this term to refer to the classical understanding of the term "van." Giordano states "A van is usually understood to be an enclosed vehicle used for the transportation of goods or animals. See Webster's Ninth New Collegiate Dictionary, 1303 (Merriam-Webster, 1986)." Id. at 322. Giordano basically says that a minivan is more of a "station wagon" (mentioned in category #1) than a van (mentioned in category #2).
If a van is set up primarily for transporting a small group of people (i.e. a minivan, as opposed to the type of van discussed in regards to the Perez case below), it will fall under category #1 and will be an "automobile" requiring PIP as long as it is not used as a taxi or the like. Note that in New Jersey Manufacturers Ins. Co. v. Hardy the New Jersey Supreme Court spoke favorably about the Giordano decision.
Perez v. Farmers Mutual Fire Ins. Co., 417 N.J. Super. 403 (App. Div. 2011): A large van with five rows of seats and fitting fifteen passengers is a "van" and fits category #2. "The church van involved in this case is a completely different type of motor vehicle than the minivan the court in Giordano concluded was a 'station wagon type' vehicle. As described by plaintiffs, the church van 'had five rows of seats' and was designed to carry up to fifteen passengers. Although there may be some large families that use such vehicles for private passenger purposes, this is not their customary use.This type of van is more commonly used by hotels, automobile rental companies, and other business operations to transport customers, similar to the use that would be made of a small bus. Thus, unlike a minivan or SUV, which today serve the same function a station wagon served when the No Fault Law, including N.J.S.A. 39:6A-2(a), was enacted in 1972, L. 1972, c. 70, the type of van owned by the church is not used primarily as a private passenger vehicle. Therefore, it is not a 'private passenger automobile of a private passenger or station wagon type' within the intent of the first part of the definition of 'automobile' in N.J.S.A. 39:6A-2(a). Instead, this vehicle is a 'van' that falls under the second part of the definition of 'automobile.'" Click here for further analysis of the Perez decision and a link to the Appellate Division's Opinion.
Wagner v. Transamerica Ins. Co., 167 N.J. Super. 25 (App.Div. 1979) certif. denied, 81 N.J. 60 (1979) Car used by dealership salesman as demonstration vehicle was "automobile". Dealer's insurance policy (which did not have a PIP endorsement) was required to cover PIP by New Jersey statute requiring that insurance policies for "automobiles" require PIP. Note that in New Jersey Manufacturers Ins. Co. v. Hardy the New Jersey Supreme Court spoke favorably about the Wagner decision.
Liberty Mut. Ins. Co. v. Thomson, 385 N.J.Super. 240, 896 A.2d 1143 (A.D.2006): PIP could not be recovered from self-insuring rental car company. Rental car was required to, and did, carry PIP coverage.
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