NJM v Klama DOCKET NO. A-1382-09T2

Scott A Sheldon

Case Conclusion Date:April 1, 2011

Practice Area:Insurance

Outcome:The argument that I asserted for NJM was accepted by the App. Div. and trial court ruling was affirmed.

Description:Klama, a motorcyclist, was involved in an accident with an uninsured vehicle. Klama was the named insured under a motorcycle insurance policy issued by Foremost, which contained policy limits for uninsured motorist (UM), bodily injury coverage, in the amount of $15,000 per person and $30,000 per accident. At the time of the accident, Klama was a resident of the household of his mother and grandfather. Consequently, Klama also was covered under his mother's and grandfather's auto insurance policies. Klama's mother was insured under a policy issued by NJM, and Klama's grandfather was insured under a Proformance policy. Both policies provided UM coverage of up to $100,000 per person and $300,000 per accident. However, both policies included "step-down" clauses, which limit the amount of UM coverage available under the policy. Klama argued that the NJM step down provision was vague and unenforceable.