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New Jersey court allows Zurich to cap underinsured motorist coverage at $15,000
The Supreme Court of New Jersey held that commercial auto policies can set underinsured motorist limits below liability if the chosen UIM meets the state requirements.
New Jersey's Supreme Court ruled that insurers may cap underinsured motorist coverage in commercial auto policies well below the policy's bodily injury liability limits. In a unanimous decision dated August 6, 2026, the court answered two questions referred by the federal Third Circuit about how New Jersey's underinsured motorist statute applies to commercial endorsements.
The dispute stemmed from a 2022 crash involving an employee of TJX Companies, who was injured while driving a vehicle owned by his employer. The Zurich American Insurance Company policy carried $2,000,000 in bodily injury liability, but an endorsement accepted by TJX set underinsured motorist coverage at $15,000 per person and $30,000 per accident.
After the at-fault driver’s insurer paid a $100,000 liability settlement, Zurich denied the employee’s UIM claim, arguing the other driver was not underinsured relative to Zurich’s $15,000 UIM per person cap. The employee sued, seeking to have the policy rewritten to provide $2,000,000 in UIM coverage to match the liability limit.
The court rejected that approach, holding that the law’s phrase “maximum . . . available under the policy” refers to the UIM limit the business selected for the named insured, not the higher liability ceiling. It also said an endorsement that sets UIM below liability does not violate the statute or public policy if the UIM satisfies legal requirements and the named insured and employees face the same limits.