A New Jersey appellate court affirmed a judgment in favor of an insured based on ambiguity. The case is Motil v. Wausau Underwriters Ins. Co., 2024 N.J. Super. LEXIS 31 (N.J. Super. Ct. App. Div. 2024). 

Britney Motil was severely injured while driving her father's Jeep. She settled a suit with the other driver for $15,000, which was the other driver's policy limit. She then sought another $100,000 in UIM benefits from her father's insurer, Wausau Underwriters, who had issued a policy that covered four separate vehicles, including the Jeep. Her father paid a separate UM/UIM premium for each of the four covered autos, one of which was the Jeep, under his policy. Motil was listed as a "covered insured" under that policy, and the Jeep was a covered auto, though it was garaged at an "alternate garaging address." However, the policy also included a "step-down provision" that limited UM/UIM coverage to $15,000 per person and $30,000 per accident for bodily injury for drivers who were neither a named insured nor a "family member" within the meaning of the policy. 

Wausau denied coverage for Motil's claim on the basis that she was not a named insured nor a "family member" under the policy, the limits of UIM benefits available to her under the policy were the same as those already paid by the other driver. Motil sued for UIM benefits, and both parties moved for summary judgment. The lower court agreed with Wausau that the step-down provision was clear, but granted Motil's motion for summary judgment based on the "reasonable expectations doctrine." The court said Wausau could not "profit off of plaintiff and her family by selling them insurance and telling them it covers all of them but then . . . tell plaintiff she should buy her own insurance if she really wants the coverage." Wausau appealed, claiming the lower court had been wrong to ignore the step-down provision in the policy.