When a Vehicle Is an Automobile – The Maze of Statutory and Case Law in New Jersey for Determining Eligibility for PIP Benefits

By Ariel C. Brownstein, Esq.*

Coverage for Personal Injury Protection (PIP) benefits in New Jersey is available to those who “sustain bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or from an automobile, and to other persons sustaining bodily injury while occupying, entering into, alighting from or using the automobile of the named insured, with permission of the named insured.” N.J.S.A. 39:6A-4. While this statute raises several eligibility issues, chief among them is: When is a vehicle considered an automobile?

An “automobile” is defined by N.J.S.A. 39:6A-2(a). In relevant part, that statute provides that an “automobile” is:

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.

In essence, the statute provides two separate distinctions of what can be considered an automobile, each with its own separate sub-elements. Excluded from the definition are motorcycles. See, Ingersoll v. Aetna Cas. &Sur. Co., 138 N.J. 236, 238 (1994). Also excluded are motor scooters and dune buggies. See, Solorzano v. Sapunaricj, 386 N.J. Super. 323, 326 (App. Div. 2006); and Wilno v. N.J. Mfrs. Ins. Co., 180 N.J. Super. 146 (App. Div. 1981) rev’d on dissent 89 N.J. 252 (1982). The first inquiry is whether the insurance carrier intended to cover the risks of driving the vehicle at issue. The more unconventional the vehicle, the less likely it will be considered an automobile for coverage purposes.

In Giordano v. Allstate, 260 N.J. Super. 329 (App. Div. 1992), at issue was a minivan fitted to carry seven passengers. The vehicle was owned by the plaintiff’s employer, who was a sales manager at a car dealership. The vehicle was available to the plaintiff to be test driven by potential customers, as well as for his unrestricted personal use. The plaintiff was involved in an accident while using the vehicle for personal purposes.

The court provided that the first inquiry was whether the minivan was “a private passenger or station wagon type automobile” or a “van…customarily used for business…purposes.” The court determined that the minivan was not a van as defined by the statute because a van was viewed by the legislature with less traditional passenger vehicles, such as pickups, panel trucks or delivery sedans. Since the vehicle was outfitted as a passenger vehicle, it was a station wagon type, therefore, the question of whether it was customarily used for business purposes was irrelevant, and the plaintiff was afforded benefits.

Therefore, the only additional inquiry when a vehicle is a private passenger type vehicle is whether it was being operated for a fee and/or normally used for public conveyance. This part of the statute is strictly construed by the courts. The courts look to whether the vehicle is generally available to the public rather than if the vehicle was operated for a fee on the date of loss. See CSC Ins. Services as Servicing Carrier for MTF of New Jersey v. Graves, 293 N.J. Super. 244 (Law Div. 1996).

If the vehicle is a pickup truck, van, panel truck and the like, the question is whether the vehicle was “customarily used in the occupation, profession or business of the insured.” In Thompson v. Potenza, 364 N.J. Super. 462 (App. Div. 2003), the plaintiff was in an accident involving a van, owned by a third party, operated in the course of the plaintiff’s employment. Discovery revealed that the plaintiff used the van approximately once a week to make deliveries, but otherwise used it for personal purposes. The court noted that the key to the dispute was the definition of “customarily” as used in the statute. Because the statute did not define customarily, the court turned to Black’s Dictionary which stated, “[u]sually, habitually, according to custom, general practice or usual order of things; regularly.” Therefore, the court found that the plaintiff’s use of the vehicle once a week did not rise to the level of establishing usual commercial use of the van and it remained a personal vehicle, entitling the plaintiff to benefits.

A court’s focus is fact sensitive and turns on the purpose and use of the vehicle. Coverage decisions should first focus on the type of vehicle in which a loss occurred, then to its use and how it is conveyed to the public. Obtaining as much information about the vehicle and its use in the beginning of the claims process is vital in determining whether a vehicle is an automobile for PIP purposes. For example, a police report that shows the letter “X” before the numerals on the license plate denotes a commercial vehicle. Police reports also denote the vehicle type and use. Recorded statements and Examinations Under Oath at the onset of a claim will also yield critical information as to the type of vehicle and the history of its use, which will help carriers determine whether the vehicle is an “automobile” as defined by N.J.S.A. 39:6A-2(a).

*Ariel is an associate in our Cherry Hill, New Jersey office. He can be reached at 856.414.6075 or acbrownstein@mdwcg.com.

Defense Digest, Vol. 20, No. 4, December 2014

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2014 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.