TRENTON, N.J., March 27 " AAA Mid-Atlantic Insurance Company of New Jersey received a qualified victory in the Superior Court of New Jersey Appellate Division on February 16. Although automobile insurers may find drivers involved in one-vehicle accidents that do not involve driver negligence are at-fault, the Department of Banking and Insurance must clearly define the term at-fault in the future.

The governing statute, the Fair Automobile Insurance Reform Act, N.J.S.A. 17:33B-1 to -64 of 1990, defines at-fault accidents without clarifying whether at-fault refers to moral culpability or actuarial assessments of anticipated future risk. At-fault accidents are those that do not involve accidents while the drivers car is lawfully parked, is struck by a hit and run driver, is rear-ended and not found to have committed any moving violations, or if the driver is either not found to have committed a moving violation while another driver was convicted in relation to the accident or the driver was acting as part of an emergency response team.

According to the statute, when fault is assigned, it is to be distributed evenly among the vehicles involved in the accident that have been found to be at fault. But the statute does not speak directly to accidents involving only one vehicle, such as the accident at issue in the case at hand, Glen Reilly v. AAA.

Reilly testified that he was following a line of cars home on a cold and rainy evening in 2003 when he lost control of his car and careened into the barrier without striking any other vehicles. The accident resulted in more than $1,000 in damage. His insurer at the time, State Farm, assessed five eligibility points to his account, but failed to notify him.

Weather or Driver At Fault?

In 2004, while covered under AAA, the point limit for insurability in the voluntary market was reduced to seven points, resulting in his coverage being dropped, largely because of the 2003 accident. At that point, Reilly appealed the points and the administrative law judge rescinded them, citing the inclement weather as the cause of the accident, and not driver negligence. But the commissioner disagreed, stating that the term at-fault accident should not be construed solely in the sense of moral culpability or proven violations of traffic regulations, but with a common sense approach recognizing its applicability in the context of insurance rating.

But the wording of the statute does not actually clarify whether fault should hinge on the lay persons understanding of blame or in light of insurance risk assessments. The court found that the law sought only to ensure that good drivers do not subsidize the insurance of bad drivers. Further complicating matters is the fact that the department has vacillated between considering negligence as well as actuarial principles in its fault assessments and excluding negligence from its assessments in different cases.

Driver At Fault, But Department Clarification Needed

With regards to the current case, the court affirmed the assessment of guilt to Reilly, the court ordered the clarification of the statute regarding the definition of at-fault to provide a more consistent application of the law.

In her decision for the court, Judge Susan L. Reisner wrote, However, while we defer to the agencys construction of the statute as reflected in its adjudication in this case, we also conclude that its implementing regulations are confusing and do not fairly give notice to anyone as to what the term at-fault means or how it should be applied to one-car accidents The agency itself has varied from its original construction of the rule and has been inconsistent in its adjudication of cases involving one-car accidents, sometimes invoking negligence concepts and other times invoking principles closer to strict liability. The record in this case also leads us to conclude that the term at-fault may be subject to varying interpretations by insurance companies thus potentially leading to arbitrary application to drivers seeking insurance. Hence, although we affirm the result in this case, we also conclude that the regulation must be amended to define the term at-fault and to clarify how it applies to one-car accidents.