njsa 39:6b-2 driving without insurance - strict liability and substantial penalties

9/28/11 4:03 PMNJSA 39:6b-2 Driving Without Insurance - Strict Liability and Substantial Penalties

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NJSA 39:6b-2 DrivingWithout Insurance -Strict Liability and

Substantial Penalties

Kenneth Vercammen's Law office representsindividuals charged with driving without insuranceand other serious traffic violations throughout NewJersey.

The mandatory penalties imposed for drivingwithout insurance is greater than the first offenderpenalties for drunk driving or possession ofmarijuana. Mandatory penalties include automaticloss of license for one year, $300.00 fine and aperiod of community service to be determined by theMunicipal Court. N.J.S.A. 39:6B-2 The no carinsurance statute is one of the few strict liabilitystatutes. "Every owner or registered owner of amotor vehicle registered or principally garaged inthis state shall maintain motor vehicle coverage,under provisions approved by the Commissioner ofInsurance." N.J.S.A. 39:6B-1 There are also courtcosts and insurance surcharges of $250.00 per yearfor three years. Failure to produce at the time of trialan insurance card or insurance policy covering the

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date of the offense creates a rebuttable presumptionthat the person was uninsured when charged with theoffense.

In State v. Kopp, 171 NJ Super 528 (Law Div.1980), the courts established that knowledge of lackof insurance is not a defense. The legislative intent isclear that knowledge of lack of insurance is not anessential element which must be proved in order tosustain a conviction of an owner who operates a carwithout insurance. However, the section whichimposes penalties against an individual who operatesa motor vehicle without liability insurance does notapply to a New Jersey resident who is driving anautomobile owned by an out-of-state friend who hadbeen in New Jersey for five weeks. State v.Arslanouk, 67 NJ Super 387 (App. Div. 1979)

The Appellate Division, in the State v.Hochman, 188 NJ Super 382 (App. Div. 1982)examined and reversed a conviction for operatingwithout liability insurance where the State failed tocarry its burden of proving that an automobileliability insurance was lawfully canceled. In this factspecific case, defendant was charged with operatinga vehicle he owned without insurance. It wasstipulated that because of long hours defendantworked, he had asked his wife to look afterhousehold matters, including insurance matters, andgave her several thousand dollars each month to payfor them. Defendant Hochmans wife arrangedthrough an insurance broker to have Allstate insurethe vehicle. The insurance broker then arranged tofinance the insurance premiums through a "LeeFinance" financial service. The defendants wife thenpaid the broker and agreed to pay the balance to thefinancial service in monthly installments of $48.00.Id at 384.

Thereafter, defendant Hochmans wife madepayments to the financial service through October13, 1979. On October 15, 1979 Allstate informeddefendants wife by mail that there was due andowing a premium of $331.00 and payment should bemade immediately. The defendants wife notified thebroker that she had received a letter from Allstateand reminded the broker that the insurance premiums

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were being financed through the finance agencypursuant to financing agreement arranged by it andtherefore she did not have to pay the balance of theaccount.

The insurance broker informed the DefendantHochmans wife that it would investigate the problemand contact her. In January 1980, because thedefendants wife had not heard from the insurancebroker, she again contacted the insurance broker andinformed him that she had received no furthercorrespondence from Allstate. She inquired into thestatus of the insurance of the vehicle, the brokerinformed the defendants wife they were stillinvestigating the problem and would contact herwhen it had been resolved. It was further stipulatedin Court that defendant was never told by his wife ofthe finance agreement or of the difficulties she hadencountered with the insurance. In May 1980,defendant was transferred to another office andneeded to use the car to get to work. According tostipulated facts, defendants wife told the defendantthat the vehicle could be driven. Defendant, relyingupon what his wife had told him and believing thatthe vehicle was insured, drove the vehicle until July15, 1980 when he was charged with violating thecompulsory insurance provisions of N.J.S.A. 39:6B-2.

The insurance broker, as an agent, had issued aninsurance identification card indicating the insurancewould remain in effect from the period August 28,1979 to August 28, 1980. In December 1979defendant and his wife moved from the residence inMontclair and left a forwarding address. Thereafterin preparing for trial defendant learned that inOctober and November 1979 Lee Finance hadliquidated without informing its clients, includingdefendants wife.

Although Allstate claimed it mailed acancellation notice, it stipulated that it had mailedthe cancellation notice to an incorrect address,mailing it to 313 Park Street rather than 314 ParkStreet. The broker, First City, never informeddefendants wife, despite her inquiry, that Allstatehad canceled the insurance policy or that the finance



agency had liquidated, or that she could reinstate thepolicy by paying the balance due on the annualpremium. The Appellate Division noted that in orderto convict a defendant-owner of operating a motorvehicle in violation of the insurance provisions, theState did not have to show a culpable mental state,i.e., that defendant knew his vehicle was uninsured.The State simply had the burden of proving beyond areasonable doubt that (1) defendant owned thevehicle, (2) the vehicle was registered in New Jersey,(3) defendant operated the vehicle or caused it to beoperated upon any public road or highway in thisState, and (4) the vehicle was without liabilityinsurance coverage required by N.J.S.A. 39:6B-1. Idat 387.

The Appellate Division held that the first threeelements of the offenses were proven beyond areasonable doubt. The pivotal issue was whether theState had proven beyond a reasonable doubt thefourth element of the defense, that the vehicle wasuninsured. The question was thus whether theliability insurance policy had been lawfully andeffectively canceled when Defendant Hochman wascharged for the offense. The Court found thatAllstate had not properly canceled the insurancepolicy. The Court held;

"A notice of cancellation of a policy ofautomobile liability insurance is effective in thisState only if it is based on one or more statutorilyenumerated reasons, including the nonpayment ofpremiums. N.J.S.A. 17:29C-7(A)(a). Moreover, priorto March 10, 1981, where, as here, the cancellationwas for nonpayment of premiums, the notice ofcancellation must have been mailed or delivered bythe insurance carrier (here Allstate) to the insured(here either defendant or his wife) at least ten daysprior to the effective date of cancellation and musthave been accompanied by a statement of the reasongiven for such cancellation. N.J.S.A. 17:29C-8.Proof of mailing of the notice of cancellation to thenamed insured at the address shown in the policywas deemed sufficient proof of notice. N.J.S.A.17:29C-10. Under this latter statue, cancellation waseffective whether or not the insured actually receivednotice of cancellation because proof of mailing, not



proof of receipt, was the determinative factor. SeeWeathers v. Hartford Ins. Group, 77 N.J. 228, 234(1978. Proof of mailing the notice, however, is notconclusive on the issue. The insured may still offerproof that he never received the notice "for thepurpose of refuting the hypothesis of mailing." Id. at235. Thus, in Weathers, the Supreme Court held:

Although the inference of non-mailing providedby evidence of non-receipt might in most cases beoutweighed by the inferences of mailing which maybe drawn from a certificate of mailing whosereliability has been established, we discern no cogentreason for depriving the trier of fact of such evidenceby holding it inadmissible , they are not conclusiveof that issue and do not preclude the existence of agenuine issue of material fact in the face of a claimof non-receipt so as to entitle the insurer to judgmentas a matter of law. See Sudduth v. CommonwealthCounty Mutual Ins. Co., 454 S. W. 2d 196 (Tex.Sup. Ct. 1970); 9 Wigmore on Evidence (3d ed.1940) Sec. 2519; cf. Fitzpatrick v. Merchants andManufacturers Fire Ins. Co., 122 N.J.L. 468 (E. &A.1939). The contrary holding of Womack v. Fenton,28 N.J. Super. 345 (App. Div. 1953), on this point ishereby overruled. Permitting the fact finder toconsider the addressee-insureds denial of receipt ofthe notice of cancellation does not improperly add tothe insurers statutory burden of proving mailing byrequiring it to prove actual receipt of the notice sincesuch testimony is admissible only as the basis for aninference of its non-mailing. The insurer still needonly prove constructive notice by adequatelyestablishing that the notice of cancellation wasmailed. Hochman at 388-389 Weathers at 235-236

The court noted that although Allstate claimedthat a notice of cancellation was sent to thedefendants wife, this did not establish that the noticesatisfied the statutory requirement of N.J.S.A.17:29C-8. There is no proof that the notice mailed tothe named insured (assuming that defendants wifewas the insured named in the policy) or that it wasmailed to the address shown in the policy, or that itscontents complied with statutory requirements. Thecourt held "thus, we are constrained to hold that theState failed to sustain its burden of proving beyond a



reasonable doubt that the Allstate automobile liabilityinsurance policy covering defendants vehicle waslawfully canceled. The Allstate policy therefore waspresumptively in full force and effect... anddefendants conviction for violating the compulsoryinsurance provisions of N.J.S.A. 39:6B-2 cannotstand. Hochman at 389-390.

The insurance statutes under Title 19 of theNew Jersey laws contain provisions whichsometimes provide that all members of a householdare covered under a policy issued to one membereven if their name is not set forth on the policy. Theuninsured defendant who lives with someone whoowns an insured car may be included under thatpersons policy.

Operation is different in non-insurance mattersthan in drunk driving cases. A defendant who isseated in the drivers seat, behind the steering wheelof a vehicle that is under tow and was in physicalcontrol of the vehicle did not "operate" the vehiclefor the purposes of prohibiting operating the vehiclewhile suspended, operating uninsured vehicle andoperating unregistered vehicle, where the vehicle didnot have an engine and incapable of being operatedunder its own power. Counsel can argue the statemust prove the defendant drove the vehicle. State v.Derby, 256 N.J. Super. 702, (Law Div. 1992).

In a case involving Personal Injury Protection/No Fault PIP benefits the Appellate Divisionrecently ruled that an insurance company did notproperly mail a notice of cancellation, thus thepolicy was not canceled. In Hodges v. PennsylvaniaNational Insurance Company, _____ NJ Super._____ (App. Div. 1992), plaintiff was in a motorvehicle accident operating a vehicle owned by hermother. Plaintiff filed a PIP suit against theinsurance company which had refused to paymedical bills and property damage. Defendantsinsurance company claimed it canceled Alva Hodgespolicy on December 16, 1988 for failure to remit thepremium payment. Defendant submitted two pagesof a November 28, 1988 "JUA Mailing List," whichindicated Alva Hodges as an insured who wasscheduled to be sent a notice of cancellation. The



mailing list contained two November 28 stamps ofthe Harrisburg Post Office and two stamps ofpostage for the numerous letters of $39.00 and$99.75. The two postage stamps together totaled$138.75. The list claimed a "total mailing" of 640notices. Plaintiff pointed out that a mailing of 640notices at $.25 per piece (the 1988 postage stampprice) should have totaled $160.00. Becausedefendant paid only $138.75, plaintiff contends thatall the lists and notices may not have been mailed.The mailing list also contained a signature andcertification of one of the defendants employees.

Plaintiffs counsel in Hodges pointed out that thePost Offices standard proof of mailing procedurediffered from defendants use of a preprinted mailinglist. Plaintiff pointed out that the US Postal Serviceutilizes a "Certificate of Mailing," PS Form 3817, forthe purposes documenting proof of mailing byregular mail. Prior to the stamping of this receipt, thePostal Service employees individually compares thereceipt with the item being mailed. These forms areavailable in advance from the Post Office. (A copyof the first class mailing Certificate of Mailing wasincluded as a footnote to the Courts opinion.) TheHodges Court noted that N.J.S.A. 17:29C-10specifically enumerates the circumstances on which anotice of cancellation is effective:

"no written notice of cancellation or of intentionnot to renew sent by an insurer to an insured inaccordance with the provisions of an automobileinsurance shall be effective unless a. (1) it is sent bycertified mail, or (2) at the time of the mailing ofsaid notice by regular mail, the insurer has obtainedfrom the Post Office Department a date stampedproof of mailing showing the name and address ofthe insured and b. the insurer has retained a duplicatecopy of the mailed notice which is certified to betrue. Slip op at 6. [Emphasis added by the Court.]

In order to be effective, notice of cancellation"must be set in strict compliance with the provisionsof N.J.S.A. 17:29C-10." Citing Lopez v. New JerseyAutomobile Full Underwriting Association, 239 NJSuper. 13, 20, (App. Div.), certif. den. 122 N.J. 131(1990) (absence of proof of personal knowledge of



mailing by postal employee or insurer employeerenders notice ineffective). The Court questionedwhether the stamped proof of payment of money inpostage was proof of mailing. The AppellateDivision in Hodges noted that our Courts haveinterpreted the statute to require a precise proof ofmailing, usually the official "U.S. Postal ServiceCertificate of Mailing."

In Celino v. General Accident Insurance, 211N.J. Super. 538 (App. Div. 1986), the Court ruledthat this specific postal certificate of mailing satisfiedthe statutes proof of mailing requirement. Celino at540-541 (determining that the insurers notice wasineffective because insured failed to retain aduplicate copy of the notice, thereby violating part(b) of the statute). The Appellate Division in Celinodetermined that defendants proof of payment ofpostage and the employees certification fell far shortof the quality of proof inherent in an official postoffice certificate. Because the defendants proofswere insufficient to establish compliance with thestatute, there existed an unresolved issues of fact.The Appellate Division found that the trial courterred and granting in summary judgment andremanded the question as to notice for furtherproceedings.

If there is a question involving impropercancellation or improper notice, we would suggestyour attorney prepare a subpoena to the insurancecompany and also a hand delivered subpoena to yourinsurance broker. You may discover notice ofcancellation was improper or notices mailed to thewrong address. We all know the poor track record byJUA and MTF companies.

If a husband and wife, or both, are named in thepolicy, Lumbermens Mutual Casualty Co. v. Carriere170 N.J. Super. 437, 450 (Law Div. 1979) supportsthe proposition that both husband and wife named inthe policy should receive notice.

A cancellation notice is invalid if issued beforethe premium due date. Recently, in Christian v.Ormsby, _____ N.J. Super _____ (Law Div. decidedDecember 18, 1992), the court held under N.J.S.A.17:29C-8, an automobile insurer may not issue a



cancellation notice to the insured for non-payment ofpremiums before the date on which the premium isdue. (This case also dealt with the incompetentJUA.) The Christian notices of cancellation and areminder notice were mailed by Liberty Mutual.However, the court found that the notice wasineffective to cancel the policy before the accidentPlaintiff Christian was involved in. The court foundthat although the notice issued by Liberty Mutual tothe Christians on October 21, 1987 stated its reasonfor cancellation as "non-payment of premium," thecourt found that, on the date the notice was mailed,the Christians premium to the JUA was not past dueand the Christians were not yet in default.

The court also rejected the JUAs argument thatthe cancellation notice could have been mailed atany time after the premium notice, so long as it didnot become effective until after the due date. Thecourt interpreted the statutory language requires 15days notice of cancellation in a language referring to"non-payment of premium" together to imply alegislative intent to provide with a 15-day graceperiod after default in the payment of an automobileinsurance policy premium before the insurer is ableto effectively cancel the policy. The purpose is toallow defaulting policyholders an opportunity duringthat grace period to pay their premiums and to keepthe policy in force. Consequently, any cancellationnotice issued before such default is premature andinvalid.

A bad check will permit insurer to cancelinsurance policy. In Abdel-Rahman v. Ludas, _____NJ Super _____ (App. Div. decided July 7, 1993), aninsurers acceptance of a check in payment of apremium is conditioned upon payment by the draweeinstitution. An insureds failure to pay the premium,which occurs when the check is dishonored, entitlesthe insurer to cancel the policy. On August 13, 1990,Ohio Casualty issued a three-month, short-termreinstatement of policy. Included in the reinstatementletter to the insured was a notice advising thereinstatement would be considered void from itsinception if the check accepted in payment of thereinstatement was dishonored when presented to thedrawee bank.



On August 22, Ohio Casualty learned that thecheck was dishonored by the insureds bank. Havinga policy of presenting a check twice for payment,Ohio Casualty redeposited the check that same date.The check was again returned for insufficient fundson August 24. On both occasions the bank mailednotices of the dishonoring to the insured. Theinsureds bank statement also indicated that thechecks had been dishonored.

Ohio Casualty canceled insured Ludas policy onSeptember 6, 1990. On September 12, 1990, thecompany informed Ludas of the cancellation, whichwas retroactively effective July 29, 1990. The insureddid no dispute the facts but claimed that the familymade a mistake and deposited the money into thewrong account. Both the motion judge and theAppellate Division found that mere delivery of thecheck, "a worthless piece of paper," to the insurerwas not enough to keep the policy in effect.

The non-insurance NJSBA 39:6B-2 statuteprovides there is a rebuttable presumption of noinsurance if no card or policy produced. Remember,however, that a presumption does not equal guilty.

The charge of simple operation withoutinsurance by the non-owner presents additionalviable defenses to the charge of no insurance. Thereis not a strict liability provision involving mereoperators. The State must prove the operator knew orshould have known from the attendant circumstancesthat the motor vehicle was without motor vehicleliability coverage. Such facts can be gathered fromthe relationship between the parties, whether or notthe vehicle had a valid inspection sticker andtestimony by the owner who often is also issued anuninsured motorist charge.

In Matlad v. US Services, 174 NJ Super. 499417 A. 2d 46 (App. Div. 1980), where husbandcanceled policy without telling wife, deletion wasvoid as against public policy and coverage continuedfor wife. The defendant/owner must operate or causethe car to be operated. If a driver took the carwithout permission that day, the owner did not causethe vehicle to be operated.



The State is still required to provide discovery.Occasionally a case is dismissed because the Statefailed to provide discovery. The bottom line is neverlet your insurance expire. Mandatory penalties areautomatic loss of license for one year, $300.00 fineand a period of community service to be determinedby the Municipal Court. If you dont have insurance,dont drive.

No insurance penalties increased 2002

39:6B-2. Penalties

2. Any owner or registrant of a motor vehicleregistered or principally garaged in this State whooperates or causes to be operated a motor vehicleupon any public road or highway in this Statewithout motor vehicle liability insurance coveragerequired by this act, and any operator who operatesor causes a motor vehicle to be operated and whoknows or should know from the attendantcircumstances that the motor vehicle is withoutmotor vehicle liability insurance coverage requiredby this act shall be subject, for the first offense, to afine of not less than $300 nor more than $1,000 anda period of community service to be determined bythe court, and shall forthwith forfeit his right tooperate a motor vehicle over the highways of thisState for a period of one year from the date ofconviction.? Upon subsequent conviction, he shallbe subject to a fine of up to $5,000 and shall besubject to imprisonment for a term of 14 days andshall be ordered by the court to perform communityservice for a period of 30 days, which shall be ofsuch form and on such terms as the court shall deemappropriate under the circumstances, and shall forfeithis right to operate a motor vehicle for a period oftwo years from the date of his conviction, and, afterthe expiration of said period, he may makeapplication to the Director of the Division of MotorVehicles for a license to operate a motor vehicle,which application may be granted at the discretion ofthe director. The directors discretion shall be basedupon an assessment of the likelihood that theindividual will operate or cause a motor vehicle tobe operated in the future without the insurancecoverage required by this act. A complaint for



violation of this act may be made to a municipalcourt at any time within six months after the date ofthe alleged offense.

Failure to produce at the time of trial aninsurance identification card or an insurance policywhich was in force for the time of operation forwhich the offense is charged creates a rebuttablepresumption that the person was uninsured whencharged with a violation of this section.

L.1972,c.197,s.2; amended 1983, c.141, s.1;1987, c.46; 1988, c.156, s.15; 1990, c.8, s.49; 1997,c.151, s.12.

39:6B-3. Uninsured motorist prevention fundThe Uninsured Motorist Prevention Fund (hereinafterreferred to as the "fund" ) is established as anonlapsing, revolving fund into which shall bedeposited all revenues from the fines imposedpursuant to section 2 of P.L. 1972, c. 197 (C. 39:6B-2). Interest received on moneys in the fund shall becredited to the fund. The fund shall be administeredby the Division of Motor Vehicles in the Departmentof Law and Public Safety.? Moneys in the fund shallbe allocated and used for the purpose of theadministrative expenses of the fund and enforcementof the compulsory motor vehicle insurance law, P.L.1972, c. 197 (C. 39:6B-1 et seq.) by the Division ofMotor Vehicles.

L.1983, c. 141, s. 2, eff. April 20, 1983.

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Kenneth Vercammen's Law office represents individuals charged withcriminal, drug offenses, and serious traffic violations throughout New Jersey.Our office helps people with traffic/ municipal court tickets including driverscharged with Driving While Intoxicated, Refusal and Driving WhileSuspended.

Kenneth Vercammen was the NJ State Bar Municipal Court Attorney ofthe Year and past president of the Middlesex County Municipal Prosecutor'sAssociation.

Criminal and Motor vehicle violations can cost you. You will have to payfines in court or receive points on your drivers license. An accumulation of toomany points, or certain moving violations may require you to pay expensivesurcharges to the N.J. DMV [Division of Motor Vehicles] or have your licensesuspended. Don't give up! The Law Office of Kenneth Vercammen canprovide experienced attorney representation for criminal motor vehicleviolations.

When your job or driver's license is in jeopardy or you are facingthousands of dollars in fines, DMV surcharges and car insurance increases,you need excellent legal representation. The least expensive attorney is notalways the answer. Schedule an appointment if you need experienced legalrepresentation in a traffic/municipal court matter.

Our website provides information on traffic offenses we can be retained torepresent people. Our website also provides details on jail terms for trafficviolations and car insurance eligibility points. Car insurance companiesincrease rates or drop customers based on moving violations.

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