In a decision that could affect auto insurance policies for millions of New Jersey drivers, a state appeals court ruled Wednesday that a drunken driver can still collect medical expenses from her carrier.
A provision in an Allstate policy excluding drunken drivers from collecting benefits is “at odds with coverage that we find legislatively required” and is unenforceable, according to a unanimous three-judge opinion by the Appellate Division of state Superior Court.
The ruling reversed a Superior Court ruling.
Allstate New Jersey Insurance Co., the state’s largest auto carrier covering 700,000 vehicles, has not decided whether to appeal, spokeswoman Sheila Breeding said. It is a unit of Allstate Corp., based in Northbrook, Ill. An appeal would typically go to the state Supreme Court.
The Insurance Council of New Jersey, an industry trade group, did not immediately return a message seeking comment.
“A lot of policies today that I’ve come across contain a similar provision,” said David Wendel, lawyer for Melanie Walcott, whose one-car crash in 2001 triggered the case.
Walcott, of Dumont, who was 21 at the time, suffered some fractures and was hospitalized for three days, accruing nearly $34,000 in medical costs, Wendel said.
She pleaded guilty to driving while intoxicated, based on Breathalyzer readings slightly above 0.10 percent, the legal limit at the time, the court said.
Allstate refused to cover her medical expenses. It noted that her auto policy bars personal injury protection benefits to those whose conduct contributed to the injuries in several ways, including drunken driving.
The company also argued that state law says people with a DWI conviction “shall have no cause of action for recovery of economic or non-economic loss sustained as a result of the accident.”
Walcott sued, contending that that law was not relevant for personal injury protection benefits. Her suit was dismissed, and she appealed.
The appellate panel noted that all vehicle owners in New Jersey must have insurance and that “every policy also must provide ‘(PIP) benefits’ that guarantee, without regard to fault, medical expense benefits to the named insured and his family household members in the event they suffer bodily injury in an automobile accident.”
The state’s no-fault insurance law ‘”gives substantial protection for economic loss to one who may be completely at fault,” according to the panel’s opinion, written by state Appellate Judge Anthony J. Parrillo.
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