A Victim’s Insurance Carrier Has No Right to Reimbursement Of Personal Injury Protection (PIP)Benefits From Self-Insured Lessor Of Vehicle Registered In Another State

 In Liberty Mutual Insurance Company v. Christopher Thomson and Hertz Rental Corporation, 385 N.J. Super. 240, 896 A.2d 1143 (2006), the Appellate Division held that the lessor is required by Statute to provide Personal Injury Protection Benefits (PIP) coverage, therefore, not liable to reimburse victim’s insurer.

Liberty Mutual Insurance Company’s  (Liberty hereinafter) insured, Alexsandr Rebe, was injured when his vehicle was struck by a Hertz rental vehicle which was being operated by a resident of Australia, Christopher Thomson.  Liberty had paid PIP benefits in accordance with the requirements of its policy and thereafter pursued Hertz for reimbursement.

The Hertz vehicle which was registered in New York and rented in North Carolina was to be returned in New York.  The rental agreement provided for this vehicle stated the following:

“ The protection will conform to the basic requirements of any applicable mandatory “no fault law” but does not include “uninsured motorist”, “underinsured motorist” “supplementary no fault” or any other optional coverage.  To the extent permitted by law, Hertz and you hereby waive and reject the inclusion of such protection”.   However, if the optional coverages are imposed by the operation of the law then Hertz would provide the minimum limits of such protection.  Additionally, Hertz’ policy warranted that its protection will be primary with respect to any insurance coverage provided by you or the operator of the vehicle.  

Hertz by virtue of its rental agreement had acknowledged that it will provide the mandatory coverage required by law in any jurisdiction in which the accident happens.

N.J.S.A. 39:6B-1(a) and N.J.S.A. 39:6A-4 require every owner of a vehicle in New Jersey to maintain an automobile insurance policy and that any standard liability policy is to contain personal injury protection benefits.  

In this case, Hertz, was self-insured and under N.J.S.A. 39:6A-1 to 34 and Ryder/P.I.E. Nationwide, Inc. v. Harbor Bay Corp., 119 N.J. 402,410, 575 A.2d 416 (1990) it has been held that “ a self-insurers coverage obligations are co-extensive with those possessing liability policies”.  Thus self-insurance certificates are the equivalent of a policy of insurance.

N.J.S.A. 17:28-1.4, the deemer statute, requires that insurers provide the minimum statutorily-required coverage for vehicles operating on New Jersey Highway for policies issued to out-of-state vehicles by insurers which do business and/or are authorized to transact business  in New Jersey.  In this case the mandatory coverage under the deemer statute includes PIP.   Therefore, Hertz as a self-insured is obligated to provided the mandatory PIP coverage for vehicles operating in New Jersey regardless of the state in which the vehicle was registered.

Right to reimbursement of PIP benefits is addressed in N.J.S.A. 39:6A-9.1 and under Unsatisfied
Claim & Judgment Fund Bd. V. N.J. Mfrs. Ins. Co., 138 N.J. 185, 191, 649 A.2d 1243 (1994).  
Both state that a PIP carrier has a right to PIP reimbursement only from non-pip carriers and uninsureds .  It should be noted that the non-pip carriers include the  insured commercial or public vehicles without pip coverage.

In this case Hertz as a self-insured vehicle was subject to the mandatory requirements of PIP coverage in New Jersey, therefore, not considered a non-pip carrier and not liable for reimbursement of PIP benefits as any other PIP carrier.


By: Nasim Oloomi. Esq.