Lawyers are citizens and drivers as well as professionals, and should know about the availability and limits of under-insured motorist coverage (UIM), which must be offered to insureds under motor vehicle policies in New Jersey. To that end, the Supreme Court’s April 11 opinion in Ferrante v. New Jersey Manufacturers Insurance Group should be of interest to those electing relatively nominal UIM coverage, which is usually sold with the uninsured coverage endorsement that must be included in the policy. UIM provides the difference between the tortfeasor’s policy limits and the insured’s own coverage at little cost.

Robert Ferrante was involved in an automobile accident and suffered damages resulting in an arbitration award of $90,000. Ferrante rejected the award and sought a trial de novo. Unfortunately, the tortfeasor had only $100,000 liability coverage. Ferrante rejected a settlement offer and entered a “high-low” agreement with the defendant tortfeasor (carrier) precluding a judgment of less than $25,000 or more than $100,000 notwithstanding any verdict. The jury awarded Ferrante $200,000 in damages, but pursuant to the “high-low,” a judgment of $100,000 was entered. From the time the complaint was filed, Ferrante never advised his carrier of the proceedings or developments in the case. The carrier was advised of the $100,000 judgment only after it was entered.