SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court and may not summarize all portions of the opinion.
Craig Chiaccheri v. Zurich American Insurance Company (A-9-25) (090943)
Argued March 31, 2026 -- Decided August 6, 2026
JUSTICE PATTERSON, writing for a unanimous Court.
The Court answers two certified questions posed by the Third Circuit. Both questions relate to N.J.S.A. 17:28-1.1(f) and its requirements for underinsured motorist (UIM) coverage in a commercial motor vehicle policy.
In the underlying matter, Craig Chiaccheri was injured in a motor vehicle accident while driving a vehicle owned by his employer and insured under a policy issued by Zurich American Insurance Company (Zurich). That policy had a $2,000,000 coverage limit for bodily injury and a $15,000 UIM coverage limit. The driver at fault in the collision with Chiaccheri had a $100,000 third-party liability insurance coverage limit. Because that exceeded the $15,000 UIM limit of the Zurich policy, Zurich denied Chiaccheri’s UIM claim.
Chiaccheri brought suit, seeking “reformation of the policy to provide $2,000,000 in UIM coverage” and arguing that “(1) the policy’s UIM limitations violated the requirement of N.J.S.A. 17:28-1.1(f) that unnamed insured employees be afforded ‘the maximum . . . underinsured motorist coverage available under the policy,’ so, relatedly, (2) the Zurich policy was also void as against public policy.” The United States District Court granted Zurich’s motion for summary judgment. Chiaccheri appealed to the Third Circuit.
As relevant to the certified questions, N.J.S.A. 17:28-1.1(f) provides that
[a] motor vehicle liability policy . . . shall not provide less
uninsured or underinsured motorist coverage for an
individual employed by the corporate or business entity
than the coverage provided to the named insured under the
policy. A policy that names a corporate or business entity
as a named insured shall be deemed to provide the
maximum uninsured or underinsured motorist coverage
available under the policy to an individual employed by the
corporate or business entity . . . .
1
In its first certified question, the Third Circuit requests that the Court determine “the ‘maximum . . . [UIM] coverage available under the policy’ that must be provided to ‘an individual employed by the corporate or business entity.’” In the second certified question, the Third Circuit inquires whether “endorsements limiting [UIM] coverage to an amount less than the general third-party liability coverage limit under the same policy” violate N.J.S.A. 17:28-1.1(f) or are otherwise contrary to public policy. The Court accepted the questions as certified. 262 N.J. 68 (2025).
HELD: *As to the first certified question, the Court concludes that under N.J.S.A. 17:28-1.1(f), the maximum UIM coverage “available under the policy” that must be provided to “an individual employed by the corporate or business entity” is coverage up to the UIM coverage limit that the corporate or business entity selected under the policy for the named insured, not UIM coverage up to the general thirdparty liability coverage limit under the policy.
*As to the second certified question, the Court holds that an
endorsement in a motor vehicle liability policy limiting UIM coverage to an amount less than the general third-party liability coverage limit under the same policy does not violate either N.J.S.A. 17:28-1.1(f) or public policy, provided that (1) the UIM coverage available to the employee under the policy meets all applicable requirements of N.J.S.A. 17:28-1.1(a) and (b); and (2) under the endorsement, the UIM coverage available to the named insured and the UIM coverage available to employees are subject to the same limits in accordance with N.J.S.A. 17:28-1.1(f).
1. The Court reviews the current language and legislative history of N.J.S.A. 17:28-1.1, including a significant amendment in 2007 following the Court’s enforcement of a “step-down” provision in Pinto v. New Jersey Manufacturers Insurance Co., 183 N.J. 405 (2005). That step-down provision in the employer’s auto policy lowered the UIM limit for employees from the limit available to the policy’s named insureds to the respective limits available under the employees’ personal policies. In the wake of Pinto, the Legislature enacted the provision at the heart of this matter, N.J.S.A. 17:28-1.1(f). A legislative statement explained that the amendment “reverses the effect of the Pinto decision by prohibiting step-down provisions in these policies” and “expressly provides that a policy that names a corporate or business entity as a named insured shall be deemed to provide the maximum uninsured or underinsured motorist coverage available under that particular policy to any individual employed by the corporate or business entity.” In James v. New Jersey Manufacturers Insurance Co., the Court explained, in deciding a retroactivity issue, that N.J.S.A. 17:28-1.1(f) mandates that “[i]f the corporation or the business entity is the only named insured” of a commercial automobile policy, “then employees of that entity must receive the maximum available amount of UM/UIM coverage by operation of law.” 216 N.J. 552, 556-58 (2014). (pp. 15-19)
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2. In response to the Third Circuit’s first certified question, the Court construes N.J.S.A. 17:28-1.1(f) in tandem with N.J.S.A. 17:28-1.1(a), which mandates that commercial auto policies provide UIM coverage that meets statutory minimums, and N.J.S.A. 17:28-1.1(b), which requires an insurer to offer UIM coverage up to “the insured’s motor vehicle liability policy limits for bodily injury and property damage.” Considered together, N.J.S.A. 17:28-1.1(a) and (b) underscore a distinction between “the insured’s motor vehicle liability policy limits for bodily injury and property damage” -- the policy’s third-party liability limits -- and the limits on first-party UIM coverage. Those are separate policy provisions that serve different purposes. The Legislature could have required that employers purchase UIM coverage at limits equal to their third-party policy limits for personal injury and property damage. It did not do so. And nothing in N.J.S.A. 17:28-1.1(f)’s first sentence suggests that the Legislature intended that UIM coverage limits in a commercial policy equal that policy’s third-party liability limits. (pp. 19-22)
3. As the Third Circuit noted, the parties to this matter dispute the meaning of N.J.S.A. 17:28-1.1(f)’s second sentence. According to Chiaccheri, the phrase the Court used in James -- the “maximum available amount of UM/UIM coverage by operation of law” -- should be read to denote the maximum UIM coverage that the corporate or business entity could have purchased under N.J.S.A. 17:28-1.1(f), not the amount of UIM coverage that the corporate or business entity actually chose. That construction contravenes the statute’s plain language. N.J.S.A. 17:28-1.1(f) mandates parity between the UIM coverage provided to the named insured and the UIM coverage provided to the employee -- not parity between the UIM coverage provided to an employee and the third-party liability coverage limits set forth in the policy. Accordingly, based on N.J.S.A. 17:28-1.1(f)’s plain language, the maximum UIM coverage “available under the policy” that must be provided to “an individual employed by the corporate or business entity” is coverage up to the UIM coverage limit that the corporate or business entity selected under the policy for the named insured, not UIM coverage up to the general third-party liability coverage limit under the policy. If the corporate or business entity has purchased UIM coverage that equals the policy’s third-party liability limit -- as N.J.S.A. 17:28-1.1(b) allows but does not require -- then the named insured and an employee are both entitled to that higher level of UIM coverage. If the corporate or business entity has purchased a lower level of UIM coverage that complies with N.J.S.A. 17:28-1.1(a)’s mandatory minimums, then the named insured and an employee are both entitled to that lower level of UIM coverage. (pp. 22-26)
4. Turning to the Third Circuit’s second certified question, the Court concludes that an endorsement in a motor vehicle liability policy limiting UIM coverage to an amount less than the general third-party liability coverage limit under the same policy does not violate N.J.S.A. 17:28-1.1(f), provided that (1) the UIM coverage available to the employee under the policy meets all applicable requirements of
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N.J.S.A. 17:28-1.1(a) and (b); and (2) under the endorsement, the UIM coverage available to the named insured and the UIM coverage available to employees are subject to the same limits in accordance with N.J.S.A. 17:28-1.1(f). The Court also finds that endorsements limiting underinsured motorist coverage to an amount less than the general third-party liability coverage limit under the same policy are not contrary to public policy, provided that the same two conditions are met. The Court reaches that determination based on the statutory text and legislative history of N.J.S.A. 17:28-1.1, which are the relevant sources of public policy here. (pp. 26-29)
5. The Court notes that the Legislature has the authority to amend N.J.S.A. 17:28-1.1 to clarify its intent, should it decide to do so. (p. 29)
CHIEF JUSTICE RABNER and JUSTICES PIERRE-LOUIS, WAINER
APTER, FASCIALE, NORIEGA, and HOFFMAN join in JUSTICE
PATTERSON’s opinion.
4
SUPREME COURT OF NEW JERSEY
A-9 September Term 2025
090943
Craig Chiaccheri,
Plaintiff-Appellant,
v.
Zurich American Insurance Company,
Defendant-Respondent.
On certification of questions of law from the United
States Court of Appeals for the Third Circuit.
Argued Decided
March 31, 2026 August 6, 2026
Matthew G. Bonanno argued the cause for appellant
(Rebenack, Aronow & Mascolo, attorneys; Matthew G.
Bonanno, of counsel and on the briefs).
Louis A. Bové argued the cause for respondent (Bodell
Bové, attorneys; Louis A. Bové and Robert D. Fischer,
on the brief).
Ryan M. Savercool argued the cause for amicus curiae
New Jersey Defense Association (McCarter & English,
attorneys; Christopher A. Rojao, of counsel, and Ryan M.
Savercool and Sofia S. Camara, on the brief).
Elizabeth R. Leong submitted a brief on behalf of amici
curiae Insurance Council of New Jersey and American
Property Casualty Insurance Association (Robinson &
Cole, attorneys; Elizabeth R. Leong, on the brief).
1
JUSTICE PATTERSON delivered the opinion of the Court.
Pursuant to Rule 2:12A-7, this Court answers two certified questions
posed by the United States Court of Appeals for the Third Circuit in an
insurance coverage appeal.
The Third Circuit asks that we interpret N.J.S.A. 17:28-1.1(f), a statute
that governs certain motor vehicle liability policies “issued in this State to a
corporate or business entity with respect to any motor vehicle registered or
principally garaged in this State,” as it applies to underinsured motorist (UIM)
coverage in a commercial motor vehicle policy. UIM coverage “provides
coverage to the policyholder” if the policyholder “suffers personal injury or
property damage caused by a motorist’s negligent operation of a vehicle and
the negligent motorist’s liability insurance is insufficient to reimburse the
policyholder’s damages.” Orientale v. Jennings, 239 N.J. 569, 576 n.1 (2019).
N.J.S.A. 17:28-1.1(f) bars a motor vehicle liability policy within the
statutory description from providing “less uninsured or underinsured motorist
coverage for an individual employed by the corporate or business entity than
the coverage provided to the named insured under the policy.” It deems a
policy “that names a corporate or business entity as a named insured” to
provide the maximum UIM coverage “available under the policy” to an
2
individual employed by the corporate or business entity, “regardless of
whether the individual is an additional named insured under that policy or is a
named insured or is covered under any other policy providing uninsured or
underinsured motorist coverage.” N.J.S.A. 17:28-1.1(f).
In its first certified question, the Third Circuit requests that we
determine “what is the ‘maximum . . . [UIM] coverage available under the
policy’ that must be provided to ‘an individual employed by the corporate or
business entity.’” We conclude that under N.J.S.A. 17:28-1.1(f), the maximum
UIM coverage “available under the policy” that must be provided to “an
individual employed by the corporate or business entity” is coverage up to the
UIM coverage limit that the corporate or business entity selected under the
policy for the named insured, not UIM coverage up to the general third-party
liability coverage limit under the policy.
In the second certified question, the Third Circuit inquires whether
“endorsements limiting underinsured motorist coverage to an amount less than
the general third-party liability coverage limit under the same policy” violate
N.J.S.A. 17:28-1.1(f) or are otherwise contrary to public policy. We hold that
an endorsement in a motor vehicle liability policy limiting UIM coverage to an
amount less than the general third-party liability coverage limit under the same
policy does not violate either N.J.S.A. 17:28-1.1(f) or public policy, provided
3
that (1) the UIM coverage available to the employee under the policy meets all
applicable requirements of N.J.S.A. 17:28-1.1(a) and (b); and (2) under the
endorsement, the UIM coverage available to the named insured and the UIM
coverage available to employees are subject to the same limits in accordance
with N.J.S.A. 17:28-1.1(f).
I.
We summarize the facts and procedural history of the underlying matter
based on the Third Circuit’s petition for certification of questions of law dated
July 14, 2025.
A.
In 2022, Craig Chiaccheri was injured in a motor vehicle accident while
driving a vehicle owned by his employer, the TJX Companies, Inc. (TJX). The
vehicle that Chiaccheri was driving at the time of the accident was insured
under a policy issued by Zurich American Insurance Company (Zurich). The
policy provided for $2,000,000 in general bodily injury liability coverage, and
it included an endorsement written by Zurich and accepted by TJX’s
representatives that limited UIM coverage to $15,000 per person and $30,000
per accident.
The driver at fault in the collision, Harvey Gonzalez, was insured under
a motor vehicle liability policy with a limit of $100,000 in third-party liability
4
insurance coverage. In settlement negotiations, Gonzalez’s insurer offered
Chiaccheri $100,000 to resolve his claims against Gonzalez. Chiaccheri
accepted that offer and settled his claim against Gonzalez.
Chiaccheri then sought UIM coverage under TJX’s Zurich policy.
Zurich advised Chiaccheri that because Gonzalez’s insurance policy limit of
$100,000 exceeded the Zurich policy’s UIM limit of $15,000, Gonzalez was
not considered an underinsured motorist. Chiaccheri and Zurich were unable
to resolve their coverage dispute.
B.
Chiaccheri filed an insurance coverage action against Zurich in the
Superior Court of New Jersey. The action was removed to the United States
District Court for the District of New Jersey.
In its petition for certification, the Third Circuit described Chiaccheri’s
allegations relevant to this matter to be “(1) the policy’s UIM limitations
violated the requirement of N.J.S.A. 17:28-1.1(f) that unnamed insured
employees be afforded ‘the maximum . . . underinsured motorist coverage
available under the policy,’ so, relatedly, (2) the Zurich policy was also void as
against public policy.” As the Third Circuit explained, Chiaccheri sought
“reformation of the policy to provide $2,000,000 in UIM coverage -- the same
amount as the policy’s bodily-injury coverage limit.”
5
Applying the substantive law of New Jersey in accordance with Erie
Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938), the United States District
Court granted Zurich’s motion for summary judgment. Among other rulings,
the District Court held that the Zurich policy does not violate N.J.S.A. 17:28-1.1(f) and is not void as against public policy. Chiaccheri appealed the
District Court’s judgment to the Third Circuit.
On July 14, 2025, in accordance with Third Circuit Local Appellate
Rule 110.1 and Rule 2:12A, the Third Circuit transmitted its petition for
certification to this Court. The Third Circuit advised the Court that this case
meets the criteria of Rule 2:12A-1, which provides that this Court “may
answer a question of law certified to it by the United States Court of Appeals
for the Third Circuit, if the answer may be determinative of an issue in
litigation pending in the Third Circuit and there is no controlling appellate
decision, constitutional provision, or statute in this State.”
The Third Circuit accordingly certified the following questions of law:
1. With respect to a “motor vehicle liability policy
. . . that names a corporate or business entity as a
named insured” under N.J.S.A. 17:28-1.1(f),
what is the “maximum . . . underinsured motorist
coverage available under the policy” that must be
provided to “an individual employed by the
corporate or business entity”?
2. Are endorsements limiting underinsured motorist
coverage to an amount less than the general third6
party liability coverage limit under the same
policy in violation of N.J.S.A. 17:28-1.1(f) or
otherwise contrary to public policy?
On October 16, 2025, we accepted the questions as certified. 262 N.J.
68 (2025).
The organizations that are participating as amici curiae in the federal
proceedings in this matter, the New Jersey Defense Association (NJDA), and
the Insurance Council of New Jersey (ICNJ) and the American Property
Casualty Insurance Association (APCIA) (jointly represented), appeared as
amici curiae before this Court.
II.
Relying on this Court’s opinion in James v. New Jersey Manufacturers
Insurance Co., 216 N.J. 552, 561-75 (2014), Chiaccheri construes N.J.S.A.
17:28-1.1(f) to entitle an employee to UIM coverage up to “the insured’s
bodily injury limits elected on any given automobile policy.” He contends that
N.J.S.A. 17:28-1.1(f)’s “notwithstanding” clause reflects the Legislature’s
intent that the provision’s requirement of maximum UIM coverage for
employees overrides an employer’s election of a lower UIM coverage limit
under subsection (b) of the same statute, and that a contrary construction of
subsection (f) would render the provision’s second sentence surplusage.
Chiaccheri asserts that Zurich’s UIM endorsement, whose UIM coverage
7
limits do not match the general liability limits of the policy, not only violates
N.J.S.A. 17:28-1.1(f) but is void as against public policy.
Also invoking James, 216 N.J. at 570-71, Zurich asserts that neither the
plain text of N.J.S.A. 17:28-1.1(f) nor its legislative history supports
Chiaccheri’s assertion that the UIM coverage available to employees must
match the policy’s third-party liability limits. It contends that instead, the
phrase “maximum . . . underinsured motorist coverage available under the
policy” refers to the UIM limits that the corporate or business entity has
selected for its motor vehicle liability policy. Zurich argues that a UIM
endorsement incorporating limits selected by the policyholder that complies
with N.J.S.A. 17:28-1.1(a)’s mandatory minimum UIM coverage is consistent
with public policy if it contains no unlawful step-down provision.
NJDA supports Zurich’s interpretation of N.J.S.A. 17:28-1.1(f)’s plain
text and legislative history, and observes that if the Legislature intends to
mandate that UIM limits match general liability limits in commercial motor
vehicle policies, it can achieve that result by amending the statute.
ICNJ and APCIA assert that the Legislature did not intend to constrain
the insurance coverage options available to businesses, and that if the Court
were to accept Chiaccheri’s interpretation of N.J.S.A. 17:28-1.1(f), that
8
decision would have substantial adverse commercial and public policy
consequences.
III.
We begin with the current statutory language of the three provisions
directly relevant to the Third Circuit’s questions: N.J.S.A. 17:28-1.1(a), (b),
and (f).
a. Except for a basic automobile insurance policy, no
motor vehicle liability policy or renewal of such policy
of insurance, including a standard liability policy for an
automobile as defined in [N.J.S.A. 39:6A-2], insuring
against loss resulting from liability imposed by law for
bodily injury or death, sustained by any person arising
out of the ownership, maintenance or use of a motor
vehicle, shall be issued in this State with respect to any
motor vehicle registered or principally garaged in this
State unless it includes coverage in limits for bodily
injury or death as follows:
(1) an amount or limit of $15,000 for plans
issued or renewed prior to January 1, 2023,
$25,000 for plans issued or renewed on or after
January 1, 2023 but prior to January 1, 2026, and
$35,000 for plans issued or renewed on or after
January 1, 2026, exclusive of interest and costs,
on account of injury to, or death of, one person,
in any one accident, and
(2) an amount or limit, subject to such limit for
any one person so injured or killed, of $30,000
for plans issued or renewed prior to January 1,
2023, $50,000 for plans issued or renewed on or
after January 1, 2023 but prior to January 1, 2026,
and $70,000 for plans issued or renewed on or
after January 1, 2026, exclusive of interest and
9
costs, on account of injury to or death of more
than one person, in any one accident, under
provisions approved by the Commissioner of
Banking and Insurance, for payment of all or part
of the sums which the insured or his legal
representative shall be legally entitled to recover
as damages from the operator or owner of an
uninsured motor vehicle, underinsured motor
vehicle, or hit and run motor vehicle, as defined
in [N.J.S.A. 39:6-78], because of bodily injury,
sickness or disease, including death resulting
therefrom, sustained by the insured, caused by
accident and arising out of the ownership,
maintenance, operation or use of such uninsured,
underinsured or hit and run motor vehicle
anywhere within the United States or Canada;
except that uninsured motorist coverage shall
provide that in order to recover for non-economic
loss, as defined in [N.J.S.A. 39:6A-2], for
accidents to which the benefits of [N.J.S.A.
39:6A-4] of that act apply, the tort option elected
pursuant to [N.J.S.A. 39:6A-8] of that act shall
apply to that injured person.
All motor vehicle liability policies, except basic
automobile insurance policies, shall also include
coverage for the payment of all or part of the sums
which persons insured thereunder shall be legally
entitled to recover as damages from owners or operators
of uninsured and underinsured motor vehicles, other
than hit and run motor vehicles, because of injury to or
destruction to the personal property of such insured,
with a limit in the aggregate for all insurers involved in
any one accident of $25,000 for plans issued or renewed
on or after January 1, 2023, and subject, for each
insured, to an exclusion of the first $500.00 of such
damages.
b. Uninsured and underinsured motorist coverage shall
be provided, as an option by an insurer to the named
10
insured electing a standard automobile insurance
policy, up to at least the following limits: $250,000.00
each person and $500,000.00 each accident for bodily
injury; $100,000.00 each accident for property damage
or $500,000.00 single limit, subject to an exclusion of
the first $500.00 of such damage to property for each
accident, except that the limits for uninsured and
underinsured motorist coverage shall not exceed the
insured’s motor vehicle liability policy limits for bodily
injury and property damage, respectively. Rates for
uninsured and underinsured motorist coverage for the
same limits shall, for each filer, be uniform on a
Statewide basis without regard to classification or
territory.
f. Notwithstanding the provisions of this section or any
other law to the contrary, a motor vehicle liability
policy or renewal of such policy of insurance, insuring
against loss resulting from liability imposed by law for
bodily injury or death, sustained by any person arising
out of the ownership, maintenance or use of a motor
vehicle, issued in this State to a corporate or business
entity with respect to any motor vehicle registered or
principally garaged in this State, shall not provide less
uninsured or underinsured motorist coverage for an
individual employed by the corporate or business entity
than the coverage provided to the named insured under
the policy. A policy that names a corporate or business
entity as a named insured shall be deemed to provide
the maximum uninsured or underinsured motorist
coverage available under the policy to an individual
employed by the corporate or business entity,
regardless of whether the individual is an additional
named insured under that policy or is a named insured
or is covered under any other policy providing
uninsured or underinsured motorist coverage.
[N.J.S.A. 17:28-1.1(a), (b), (f).]
11
Those provisions are the product of legislative amendments over several
decades.
The original version of N.J.S.A. 17:28-1.1, enacted in 1968 to “provide
greater protection for the victims of uninsured motorists,” required uninsured
motorist (UM) coverage up to specified limits, but did not address UIM
coverage. L. 1968, c. 385. In a 1972 amendment, the Legislature mandated
that automobile liability policies within the statutory description, in addition to
other requirements imposed by the statute, “shall also include” UM coverage
up to specified limits. L. 1972, c. 204.
The Legislature addressed UIM coverage in N.J.S.A. 17:28-1.1 for the
first time in a 1983 amendment. L. 1983, c. 65, § 5. It enacted the first
version of N.J.S.A. 17:28-1.1(b), providing in part that UIM coverage as well
as UM coverage up to limits specified in the statute “shall be provided as an
option by an insurer to the named insured.” Ibid. The Legislature defined
UIM coverage, “for the purposes of this section,” to mean “insurance for
damages because of bodily injury and property damage resulting from an
accident arising out of the ownership, maintenance, or use of an underinsured
motor vehicle.” Ibid.
In another enactment later in 1983, the Legislature amended N.J.S.A.
17:28-1.1(a) and (b), added N.J.S.A. 17:28-1.1(c) and (d), which are not
12
directly pertinent to this matter, and created a separate definitional section,
N.J.S.A. 17:28-1.1(e), which includes the definition of UIM coverage set forth
above. L. 1983, c. 362. The bill’s sponsors stated that the law “offers
motorists for the first time the option to choose the type of insurance coverage
that suits their needs and finances.” Sponsors’ Statement to A. 3981 (L. 1983,
c. 362). The Legislature also amended N.J.S.A. 17:28-1.1 in 1988, 1998, and
2003, to increase mandatory minimum coverage limits and to make minor
changes not directly relevant to the instant case. L. 1988, c. 119, § 11; L.
1998, c. 21, § 71; L. 2003, c. 89, § 59.
In 2005, this Court decided Pinto v. New Jersey Manufacturers
Insurance Co., 183 N.J. 405 (2005). There, the Court enforced a “step-down”
provision in a commercial automobile policy issued by the defendant insurer to
the employer of plaintiff Raymond Pinto, Jr. Id. at 412-17.
While driving a truck owned by his employer, Pinto was seriously
injured in a collision with an underinsured driver. Id. at 407-08. The
employer’s commercial motor vehicle insurance policy included an
endorsement with a limit of $1,000,000 per accident, which provided UM and
UIM coverage for “all sums the insured is legally entitled to recover as
compensatory damages from the owner or driver of an uninsured motor vehicle
or an underinsured motor vehicle.” Id. at 408.
13
The employer’s policy, however, had two step-down provisions “that
lessened the limit of UM/UIM coverage available in certain circumstances for
persons who were not ‘named insureds’” under the policy. Ibid. One of those
step-down provisions applied if (1) the insured was not the individual named
insured under the policy; (2) the insured was an individual named insured
under “one or more other policies providing similar coverage;” and (3) “[a]ll
such other policies” had “a limit of insurance for similar coverage which is
less than the Limit of Insurance for this coverage.” Ibid.
The coverage available to Pinto satisfied all the requirements of that
step-down clause. Id. at 407-08. Pinto was not a named insured on his
employer’s policy, but he was a named insured under his personal automobile
insurance policy, and that policy provided UIM bodily injury coverage of up to
$100,000 per person. Id. at 409.
After receiving $30,000 of the $300,000 limit under the responsible
driver’s insurance policy, Pinto filed a declaratory judgment action against his
insurer, seeking UIM coverage up to the $1,000,000 limit. Id. at 409-10. The
trial court denied the insurer’s motion for summary judgment. Id. at 410. The
Appellate Division reversed, enforcing the step-down provision and limiting
Pinto’s UIM recovery to $100,000, the UIM limit in his personal automobile
14
policy. Pinto v. N.J. Mfrs. Ins. Co., 365 N.J. Super. 378, 382-83 (App. Div.
2004).
Pinto appealed, and this Court affirmed the Appellate Division’s
judgment. Pinto, 183 N.J. at 412-17. The Court acknowledged that step-down
provisions “may result in differential treatment of similar plaintiffs based on
the existence of other available insurance.” Id. at 412. It concluded, however,
that there was nothing “unclear, ambiguous or unfair” about the step-down
provisions at issue, and enforced those provisions based on contract law. Id. at
416-17.
In the wake of this Court’s decision in Pinto, the Legislature amended
N.J.S.A. 17:28-1.1 to add the provision at the heart of this matter, N.J.S.A.
17:28-1.1(f). See L. 2007, c. 163, § 1 (eff. Sept. 10, 2007).
The Assembly Committee Statement explained that Senate Bill 1066 --later enacted as N.J.S.A. 17:28-1.1(f) -- “prohibits the use of ‘step-down’
provisions in motor vehicle liability policies issued to corporate or business
entities to lower uninsured or underinsured motorist coverage for employees to
the limits of coverage available to the employees under their personal
policies.” A. Fin. Insts. & Ins. Comm. Statement to S. 1666 (May 10, 2007).
The Committee stated the holding of Pinto to be that “as to a motor vehicle
liability policy that names a corporate or business entity as a named insured,
15
step-down provisions which limit uninsured or underinsured motorist coverage
for employees of that entity that are not individually named on the policy are
valid and enforceable.” Ibid. The Committee added that
[t]his bill reverses the effect of the Pinto decision by
prohibiting step-down provisions in these policies.
Further, the bill expressly provides that a policy that
names a corporate or business entity as a named insured
shall be deemed to provide the maximum uninsured or
underinsured motorist coverage available under that
particular policy to any individual employed by the
corporate or business entity, regardless of whether the
individual is an additional named insured under that
policy, or is a named insured, or is covered under any
other policy providing uninsured or underinsured
motorist coverage.
[Ibid.]
Seven years later, this Court held in James that N.J.S.A. 17:28-1.1(f) did
not “retroactively apply to an accident that preceded the new legislation’s
effective date.” 216 N.J. at 556-57. In its retroactivity analysis, the Court
considered the Legislature’s intent when it enacted N.J.S.A. 17:28-1.1(f). Id.
at 565-69. The Court noted in James that the first sentence of that new
subsection stated that a policy in the category described “shall not provide less
uninsured or underinsured motorist coverage for an individual employed by the
corporate or business entity than the coverage provided to the named insured
under the policy.” Id. at 565-66 (emphasis removed) (quoting N.J.S.A. 17:28-1.1(f)). The Court held that the “straightforward language” of N.J.S.A. 17:28-16
1.1(f)’s first sentence “prohibits providing an employee with less coverage
than the named insured on a corporate or business entity’s commercial
automobile liability policy.” Id. at 566. The Court added that the subsection’s
second sentence “further directs what should happen if the corporate or
business entity’s commercial automobile liability policy has not identified any
named insured -- other than the business entity itself -- which was the same
situation as existed in Pinto.” Ibid.
The Court held that “step-down provisions are not ultra vires as a result
of the statute’s plain language.” Ibid. It reasoned that instead, N.J.S.A. 17:28-1.1(f) “clearly altered how policies containing such provisions would be
permitted to operate in respect of employees.” Id. at 567. The Court
explained the import of N.J.S.A. 17:28-1.1(f):
The level of UM/UIM coverage for a “named insured”
in a policy shall be the same level that is provided to
employees of the corporation or business entity by
operation of law, as directed through the first sentence
of the new legislation. If the corporation or the
business entity is the only named insured, then
employees of that entity must receive under the
commercial policy the maximum available amount of
UM/UIM coverage by operation of law, as directed
through the second sentence of the new legislation.
[Id. at 568.]
The Court held in James that when N.J.S.A. 17:28-1.1(f) became
effective, it “applied to and prospectively reformed, for employees, a
17
corporation’s or business entity’s motor vehicle liability policy containing
UM/UIM step-down provisions, including policies that were in force as of the
law’s effective date, September 10, 2007.” Id. at 574. Therefore, “employees
seeking coverage for accidents occurring after the legislation took effect would
be covered under reformed policies, as directed by law pursuant to the
legislation.” Id. at 569. That was not true, however, for accidents that
occurred before the legislation took effect: “Thus, an accident to an employee
occurring after the effective date of the amendment but before the expiration of
the policy period would be treated differently by operation of law than would
be an accident that preceded that law’s effective date.” Id. at 571-72.
After James, the Legislature enacted one more amendment to
N.J.S.A. 17:28-1.1. It amended N.J.S.A. 17:28-1.1(a) to mandate UIM
coverage at minimum levels and prescribe phased-in increases in UM and UIM
minimum coverage under standard automobile policies. L. 2022, c. 87. As the
Senate Budget and Appropriations Committee Statement to Senate Bill 481
explained, the bill “requires automobile insurance policies to provide certain
minimum amounts of liability, uninsured motorist, and underinsured motorist
coverage.” S. Budget & Appropriations Comm. Statement to S. 481 (June 27,
2022). In that most recent amendment, however, the Legislature made no
change to N.J.S.A. 17:28-1.1(f).
18
IV.
Against that backdrop of statutory and case law, we answer the Third
Circuit’s certified questions.
A.
In response to the Third Circuit’s first certified question, we construe the
statutory language, “the maximum . . . underinsured motorist coverage
available under the policy” that must be provided to “an individual employed
by the corporate or business entity,” that appears in N.J.S.A. 17:28-1.1(f)’s
second sentence.
When we interpret a statute, “the Legislature’s intent is paramount” to
our analysis, and “the plain language of the statute is crucial to determining
legislative intent.” In re Est. of Jones, 259 N.J. 584, 595 (2025) (citing
DiProspero v. Penn, 183 N.J. 477, 492 (2005)); accord W.S. v. Hildreth, 252
N.J. 506, 519 (2023) (“The ‘best indicator’ of legislative intent ‘is the statutory
language.’” (quoting State v. Lane, 251 N.J. 506, 518 (2022))). We “ascribe to
the statutory words their ordinary meaning and significance and read them in
context with related provisions so as to give sense to the legislation as a
whole.” DiProspero, 183 N.J. at 492 (citing Lane v. Holderman, 23 N.J. 304,
313 (1957)). We “do not support interpretations that render statutory language
as surplusage.” Burgos v. State, 222 N.J. 175, 203 (2015).
19
“When the plain language of a statute is clear and unambiguous, we
apply the law as written.” Hildreth, 252 N.J. at 518. If the statutory text is
ambiguous, “we may turn to extrinsic evidence including legislative history to
aid our inquiry.” Ibid. (citing DiProspero, 183 N.J. at 492-93; Marino v.
Marino, 200 N.J. 315, 329 (2009)).
We construe N.J.S.A. 17:28-1.1(f) in tandem with N.J.S.A. 17:28-1.1(a)
and (b), which prescribe general requirements for UIM coverage in standard
motor vehicle liability policies. N.J.S.A. 17:28-1.1(a) mandates that such
policies provide UIM coverage and requires that coverage meet statutory
minimums. And N.J.S.A. 17:28-1.1(b) requires an insurer to offer UIM
coverage, “as an option by an insurer to the named insured electing a standard
automobile insurance policy, up to at least” the specific limits set forth in that
provision. But there is an upper limit to the UIM coverage that may be offered
and purchased: “the limits for . . . underinsured motorist coverage shall not
exceed the insured’s motor vehicle liability policy limits for bodily injury and
property damage, respectively.” N.J.S.A. 17:28-1.1(b).
Considered together, N.J.S.A. 17:28-1.1(a) and (b) clearly reveal
legislative intent in two important respects. First, the Legislature intended that
insurers offer a range of UIM coverage options to policyholders, who have the
opportunity to choose from those options “the type of insurance coverage that
20
suits their needs and finances.” Sponsors’ Statement to A. 3981 (L. 1983, c.
362). Second, the Legislature underscored the distinction between “the
insured’s motor vehicle liability policy limits for bodily injury and property
damage” -- the policy’s third-party liability limits -- and the limits on firstparty UIM coverage. N.J.S.A. 17:28-1.1(b). Those are separate policy
provisions that serve different purposes.
The Legislature could have required insurers to offer -- and commercial
policyholders to purchase -- UIM coverage at limits equal to their third-party
policy limits for personal injury and property damage. It did not do so. Ibid.
It merely prescribed that a policy’s first-party UM and UIM limits cannot
exceed the policy’s third-party liability limits. Ibid.
In the first sentence of N.J.S.A. 17:28-1.1(f), the Legislature acted to
ensure parity between the UIM coverage provided to “an individual employed
by the corporate or business entity” and the UIM coverage “provided to the
named insured under the policy.” See James, 216 N.J. at 565-66 (construing
the first sentence of N.J.S.A. 17:28-1.1(f) to bar step-down provisions
affording employees “less coverage” for UIM than the coverage provided to
the named insured on the corporate or business entity’s commercial liability
policy).
21
Nothing in N.J.S.A. 17:28-1.1(f)’s first sentence suggests that the
Legislature intended that UIM coverage limits in a commercial policy equal
that policy’s third-party liability limits. See N.J.S.A. 17:28-1.1(f); Pinto, 183
N.J. at 408-09, 412-17. To the contrary, N.J.S.A. 17:28-1.1(f) addressed a
different category of provision -- a step-down provision tying UIM coverage to
the coverage available under other policies -- that the Legislature acted to
eliminate. Ibid.
As the Third Circuit noted, the parties to this matter dispute the meaning
of N.J.S.A. 17:28-1.1(f)’s second sentence. That sentence states that a policy
that “names a corporate or business entity as a named insured” shall be deemed
to “provide the maximum [UM or UIM] coverage available under the policy to
an individual employed by the corporate or business entity, regardless of
whether the individual is an additional named insured under that policy or is a
named insured or is covered under any other policy providing [UM or UIM]
coverage.” N.J.S.A. 17:28-1.1(f).
Chiaccheri invokes the Court’s observation in James that “[i]f the
corporation or the business entity is the only named insured, then employees of
that entity must receive under the commercial policy the maximum available
amount of UM/UIM coverage by operation of law, as directed through the
second sentence of the new legislation.” James, 216 N.J. at 568. According to
22
Chiaccheri, the phrase the Court used in James -- the “maximum available
amount of UM/UIM coverage by operation of law” -- should be read to denote
the maximum UIM coverage that the corporate or business entity could have
purchased under N.J.S.A. 17:28-1.1(f), not the amount of UIM coverage that
the corporate or business entity actually chose. Chiaccheri construes the
phrase “[n]otwithstanding the provisions of this section or any law to the
contrary” that appears in N.J.S.A. 17:28-1.1(f) to mean that the corporate or
business entity’s decision to purchase coverage up to a limit lower than the
maximum UIM coverage that the statute allows -- as N.J.S.A. 17:28-1.1(b)
authorizes it to do -- is nullified by N.J.S.A. 17:28-1.1(f).
We view Chiaccheri’s construction of N.J.S.A. 17:28-1.1(f)’s second
sentence to contravene the statute’s plain language. The Legislature prohibited
a policy governed by N.J.S.A. 17:28-1.1(f) from providing “less [UM or UIM]
coverage for an individual employed by the corporate or business entity than
the coverage provided to the named insured under the policy.” N.J.S.A. 17:28-1.1(f). In other words, N.J.S.A. 17:28-1.1(f) mandates parity between the UIM
coverage provided to the named insured and the UIM coverage provided to the
employee -- not parity between the UIM coverage provided to an employee
and the third-party liability coverage limits set forth in the policy. Ibid. The
Legislature did not suggest -- let alone state -- that a policy issued to a
23
corporate or business entity must be reformed to provide the named insured’s
employees the maximum UIM coverage that an insurer is statutorily permitted
to offer policyholders as an option. See ibid. Instead, the Legislature
determined that the UIM limits in the policy should govern, deeming such a
policy to “provide the maximum [UM or UIM] coverage available under the
policy to an individual employed by the corporate or business entity.” Ibid.
(emphasis added).1
N.J.S.A. 17:28-1.1(f), in short, does not tie the employee’s UIM
coverage afforded to a UIM coverage limit that could have been agreed upon
in a hypothetical policy, but to the UIM coverage limit that appears in the
actual policy issued to the corporate or business entity. Ibid.
1
We disagree with Chiaccheri’s argument that unless the Court accepts his construction of N.J.S.A. 17:28-1.1(f), that provision’s second sentence would be nothing more than “surplusage.” N.J.S.A. 17:28-1.1(f)’s first sentence sets forth the statute’s parity requirement and bars commercial automobile insurance policies from providing “less [UM or UIM] coverage for an individual employed by the corporate or business entity than the coverage provided to the named insured under the policy.” N.J.S.A. 17:28-1.1(f). By virtue of the second sentence, existing policies that would otherwise not comply with the requirements of the first sentence are deemed to provide the coverage that the statute requires to an employee, whether or not the individual is a named insured and whether or not the employee is covered under another policy providing UM/UIM coverage. Ibid. N.J.S.A. 17:28-1.1(f)’s two sentences serve the same legislative goal -- to ensure the elimination of stepdown provisions such as that enforced in Pinto, and to achieve parity with respect to the UM/UIM coverage provided to named insureds and their employees. The two sentences further that goal in different ways, however, and neither constitutes surplusage.
24
Nor does the “notwithstanding” clause in N.J.S.A. 17:28-1.1(f)’s first
sentence alter the analysis. That clause -- “[n]otwithstanding the provisions of
this section or any other law to the contrary” -- does not negate the UIM
coverage terms of a policy; instead, it overrides any statute or case law that
might conflict with N.J.S.A. 17:28-1.1(f)’s parity requirement.
Accordingly, based on N.J.S.A. 17:28-1.1(f)’s plain language, we hold
that the maximum UIM coverage “available under the policy” that must be
provided to “an individual employed by the corporate or business entity” is
coverage up to the UIM coverage limit that the corporate or business entity
selected under the policy for the named insured, not UIM coverage up to the
general third-party liability coverage limit under the policy. If the corporate or
business entity has purchased UIM coverage that equals the policy’s thirdparty liability limit -- as N.J.S.A. 17:28-1.1(b) allows but does not require --then the named insured and an employee are both entitled to that higher level
of UIM coverage. If the corporate or business entity has purchased a lower
level of UIM coverage that complies with N.J.S.A. 17:28-1.1(a)’s mandatory
minimums, then the named insured and an employee are both entitled to that
lower level of UIM coverage.
Our construction of the statute comports with the Legislature’s intent to
provide options to insureds with respect to UM/UIM coverage; to eliminate
25
step-down provisions such as the provision at issue in Pinto; and to achieve
parity between the UM/UIM coverage available to the named insured and the
UIM coverage available to other employees covered by the commercial motor
vehicle policy. See Sponsors’ Statement to A. 3981; A. Fin. Insts. & Ins.
Comm. Statement to S. 1666; see also James, 216 N.J. at 565-66.
B.
We next answer the Third Circuit’s second certified question: “Are
endorsements limiting underinsured motorist coverage to an amount less than
the general third-party liability coverage limit under the same policy in
violation of N.J.S.A. 17:28-1.1(f) or otherwise contrary to public policy?”
For the reasons set forth above, we conclude that an endorsement in a
motor vehicle liability policy limiting UIM coverage to an amount less than
the general third-party liability coverage limit under the same policy does not
violate N.J.S.A. 17:28-1.1(f), provided that (1) the UIM coverage available to
the employee under the policy meets all applicable requirements of N.J.S.A.
17:28-1.1(a) and (b); and (2) under the endorsement, the UIM coverage
available to the named insured and the UIM coverage available to employees
are subject to the same limits in accordance with N.J.S.A. 17:28-1.1(f). See
N.J.S.A. 17:28-1.1(f); A. Fin. Insts. & Ins. Comm. Statement to S. 1666.
26
Finally, we turn to the question whether endorsements limiting
underinsured motorist coverage to an amount less than the general third-party
liability coverage limit under the same policy are contrary to public policy.
In certain circumstances, this Court has held insurance policy provisions
to be void because they are contrary to New Jersey public policy. See, e.g.,
Sun Life Assurance Co. of Can. v. Wells Fargo Bank, N.A., 238 N.J. 157, 160,
173-187 (2019) (holding that stranger-originated life insurance policies are
void as against public policy); Huggins v. Aquilar, 246 N.J. 75, 89-90 (2021)
(voiding on public policy grounds a garage policy provision that excluded
liability coverage for an entire class of permissive users).
Statutes and case law are among the sources of public policy that may be
relevant to a court’s determination. See, e.g., Vitale v. Schering-Plough Corp.,
231 N.J. 234, 240 (2017) (holding a contractual provision void as against
public policy based on a statute); Maw v. Advanced Clinical Commc’ns, Inc.,
179 N.J. 439, 444 (2004) (stating that for purposes of N.J.S.A. 34:19-3(c)(3), a
provision of the Conscientious Employment Protection Act, the Legislature’s
reference “to a ‘clear mandate of public policy’ conveys a legislative
preference for a readily discernable course of action that is recognized to be in
the public interest”); Pierce v. Ortho Pharm. Corp., 84 N.J. 58, 72 (1980)
(holding, in the setting of a common-law wrongful discharge action, that a
27
court may look to “legislation; administrative rules, regulations or decisions;
and judicial decisions” as sources of public policy).
Here, the relevant sources of public policy are the statutory text and
legislative history of N.J.S.A. 17:28-1.1. The Legislature acted to provide
policyholders the opportunity to purchase “the type of insurance coverage that
suits their needs and finances.” N.J.S.A. 17:28-1.1(a), (b), (f); Sponsors’
Statement to A. 3981 (L. 1983, c. 362). It sought to prohibit step-down
provisions, such as the provision in Pinto, that reduce UIM coverage for
employees to the limits of coverage available to the employees under their
personal policies. N.J.S.A. 17:28-1.1(f); A. Fin. Insts. & Ins. Comm.
Statement to S. 1666. And it required that UIM coverage be provided in
standard motor vehicle liability policies at mandatory minimum levels.
N.J.S.A. 17:28-1.1(a); S. Budget & Appropriations Comm. Statement to S.
481.
We conclude that an endorsement in a motor vehicle liability policy
limiting UIM coverage to an amount less than the general third-party liability
coverage limit under the same policy does not violate public policy, provided
that (1) the UIM coverage available to the employee under the policy meets all
applicable requirements of N.J.S.A. 17:28-1.1(a) and (b); and (2) under the
endorsement, the UIM coverage available to the named insured and the UIM
28
coverage available to employees are subject to the same limits in accordance
with N.J.S.A. 17:28-1.1(f).
C.
The Legislature has the authority to amend N.J.S.A. 17:28-1.1 to clarify
its intent, should it decide to do so. Johnson v. Wilkerson, 262 N.J. 75, 89
(2025); Bulur v. Off. of Att’y Gen., 261 N.J. 275, 294 (2025).
CHIEF JUSTICE RABNER and JUSTICES PIERRE-LOUIS, WAINER
APTER, FASCIALE, NORIEGA, and HOFFMAN join in JUSTICE
PATTERSON’s opinion.
29