N.J.S.A. 17:28-1.1(f): Employee UIM “Maximum Available Under the Policy” Means the Employer-Selected UIM Limit (Not the Liability Limit)

1. Introduction

This case arises from a workplace driving accident and asks how far N.J.S.A. 17:28-1.1(f)—enacted to eliminate “step-down” UIM/UM provisions in commercial auto policies—goes in dictating UIM limits for employees.

Parties and facts. Craig Chiaccheri, an employee of TJX Companies, Inc. (TJX), was injured while driving a TJX-owned vehicle insured by Zurich American Insurance Company (Zurich). The Zurich policy carried a $2,000,000 general bodily injury liability limit but—via a Zurich-written endorsement accepted by TJX—only $15,000 per-person / $30,000 per-accident UIM limits. The at-fault driver had $100,000 in liability coverage. Zurich denied Chiaccheri’s UIM claim because the tortfeasor’s $100,000 limit exceeded the policy’s $15,000 UIM limit, meaning the tortfeasor was not “underinsured” as defined by the policy/statutory framework.

Core dispute. Chiaccheri sought reformation to $2,000,000 in UIM coverage and argued the endorsement violated N.J.S.A. 17:28-1.1(f) and public policy by failing to provide employees the “maximum…UIM coverage available under the policy.” The federal district court rejected the claim on summary judgment; the Third Circuit certified two interpretive questions to the New Jersey Supreme Court.

2. Summary of the Opinion

The Court unanimously holds that “maximum…UIM coverage available under the policy” in N.J.S.A. 17:28-1.1(f) means the UIM limit chosen in the policy for the named insured, not the policy’s general third-party liability limit. It further holds that endorsements limiting UIM to less than the liability limit do not violate the statute or public policy if they (i) comply with the statute’s minimum/offer provisions and (ii) maintain parity between named insured and employees.

3. Analysis

3.1 Precedents Cited

• Pinto v. New Jersey Manufacturers Insurance Co., 183 N.J. 405 (2005)
  Role in this opinion: Pinto is the historical catalyst. It enforced a “step-down” endorsement in a commercial policy that reduced an employee’s UM/UIM recovery to the lower limits of the employee’s personal auto policy. The Court here treats Pinto as the decision the Legislature targeted in 2007 by enacting N.J.S.A. 17:28-1.1(f), but emphasizes that the 2007 fix was about eliminating step-downs and ensuring parity—not mandating UIM equal to liability limits.
• James v. New Jersey Manufacturers Insurance Co., 216 N.J. 552 (2014)
  Role in this opinion: James is the Court’s main interpretive anchor for subsection (f). James described (f)’s first sentence as a parity mandate and explained the second sentence’s function where the corporate entity is the only named insured. Chiaccheri relied on James’s phrase “maximum available amount…by operation of law” to argue for liability-limit-level UIM; the Court distinguishes that language and reads James as consistent with policy-selected UIM limits rather than hypothetical maximum purchasable limits.
• Orientale v. Jennings, 239 N.J. 569 (2019)
  Role in this opinion: Provides a concise definition of UIM coverage’s function (first-party protection when the tortfeasor’s liability coverage is insufficient). The Court uses it as a framing reference, not as a source of the statutory rule at issue.
• In re Est. of Jones, 259 N.J. 584 (2025); DiProspero v. Penn, 183 N.J. 477 (2005); W.S. v. Hildreth, 252 N.J. 506 (2023); State v. Lane, 251 N.J. 506 (2022); Lane v. Holderman, 23 N.J. 304 (1957); Burgos v. State, 222 N.J. 175 (2015); Marino v. Marino, 200 N.J. 315 (2009)
  Role in this opinion: These cases supply the Court’s interpretive toolkit: primacy of legislative intent, plain meaning in context, in pari materia reading with related provisions, avoidance of surplusage, and use of legislative history only when needed.
• Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938)
  Role in this opinion: Explains why the federal district court applied New Jersey substantive law; it is procedural background for the certification posture.
• Sun Life Assurance Co. of Can. v. Wells Fargo Bank, N.A., 238 N.J. 157 (2019); Huggins v. Aquilar, 246 N.J. 75 (2021); Vitale v. Schering-Plough Corp., 231 N.J. 234 (2017); Maw v. Advanced Clinical Commc'ns, Inc., 179 N.J. 439 (2004); Pierce v. Ortho Pharm. Corp., 84 N.J. 58 (1980)
  Role in this opinion: These decisions support the framework for evaluating “public policy” challenges to insurance or contract provisions, emphasizing that statutes and their legislative history are key sources of public policy. The Court uses them to ground its conclusion that the relevant public policy is expressed in N.J.S.A. 17:28-1.1’s text/history—and that those sources do not condemn UIM-below-liability endorsements that meet statutory conditions.
• Johnson v. Wilkerson, 262 N.J. 75 (2025); Bulur v. Off. of Att'y Gen., 261 N.J. 275 (2025)
  Role in this opinion: Cited for the unremarkable but important point that the Legislature can amend the statute if it wants a different result (e.g., to require UIM equal to liability limits in commercial policies).

3.2 Legal Reasoning

(a) The Court reads subsection (f) with subsections (a) and (b). The Court treats N.J.S.A. 17:28-1.1(a) and (b) as establishing the baseline architecture: (a) mandates minimum UM/UIM coverage; (b) requires insurers to offer UM/UIM up to specified amounts, but caps UM/UIM so it cannot exceed the policy’s liability limits. Critically, (b) also reflects legislative design to provide choices to insureds rather than force UM/UIM to match liability limits.

(b) Liability limits and UIM limits are distinct policy components with distinct purposes. The Court emphasizes that third-party liability coverage (protecting the insured against claims by others) is not the same as first-party UIM coverage (protecting the insured/covered persons when the tortfeasor is inadequately insured). The Legislature could have mandated equality between the two in commercial policies, but did not.

(c) Subsection (f) is about parity (and eliminating step-downs), not about maximizing UIM to liability limits. The first sentence of (f) forbids giving employees less UM/UIM than the named insured. The second sentence “deems” coverage at the maximum available under the policy for employees even if they are not named insureds and regardless of other coverage—functionally ensuring employees receive the policy’s UM/UIM benefit without being diminished by step-down mechanics tied to personal policies.

(d) “Maximum…available under the policy” means what the policy actually provides. The Court rejects Chiaccheri’s attempt to transform “maximum…available under the policy” into “maximum the employer could have bought under the statute.” The key phrase is “under the policy,” which points to the policy’s UIM limit as purchased and written. Thus, the “maximum” for employees is the same UIM limit the corporate insured selected for itself.

(e) The “notwithstanding” clause does not rewrite purchased limits. The opening phrase (“Notwithstanding the provisions of this section or any other law to the contrary”) is read as resolving conflicts in favor of subsection (f)’s parity rule; it is not a mandate that overrides the insured’s election of a lower UIM limit under subsection (b).

(f) The Court answers the endorsement/public policy question by tying validity to statutory compliance. An endorsement limiting UIM below liability limits is valid if (i) minimums/offer-and-cap rules in (a) and (b) are satisfied and (ii) parity under (f) is preserved. Public policy analysis yields the same result because the relevant public policy is the statute itself (and its legislative history), which targets step-downs, not low-but-compliant UIM selections.

3.3 Impact

1) Clarifies employee UIM expectations in commercial fleets. Employees covered by corporate policies cannot use subsection (f) to “bootstrap” UIM coverage to the policy’s liability limit. Their entitlement tracks the UIM limit actually purchased.

2) Preserves commercial insureds’ ability to buy low UIM limits (within statutory minimums). Businesses can continue to choose UIM limits based on cost/risk preferences, including limits far below large liability towers, without violating (f)—so long as employees are treated the same as the named insured regarding UIM limits.

3) Narrows the litigation focus from “liability-limit parity” to “named-insured parity.” Future disputes will likely center on whether a policy/endorsement in practice provides employees “less” UM/UIM than the named insured (classic step-down behavior), rather than whether UIM is “too low” compared to liability limits.

4) Drafting and compliance consequences for insurers. Insurers may use endorsements to set UIM limits below liability limits, but must ensure (a) minimums are met, (b) offers/limits conform to the statutory structure, and (c) no employee-specific reduction breaks parity (including indirect reductions tied to other policies).

5) Legislative invitation. The Court explicitly notes that if the Legislature wants to require UIM limits in commercial policies to match liability limits (or to impose other constraints), it can amend N.J.S.A. 17:28-1.1.

4. Complex Concepts Simplified

• Underinsured motorist (UIM) coverage: First-party coverage that may pay an insured/covered person when the at-fault driver’s liability insurance is not enough to cover damages.
• Third-party liability limits vs. UIM limits: Liability limits protect the insured from claims by others; UIM limits protect the insured/covered persons from inadequately insured tortfeasors. They can be different numbers in the same policy.
• Endorsement: A policy add-on that modifies terms/limits. Here, it set UIM at $15,000/$30,000 despite $2,000,000 liability limits.
• “Step-down” provision: A clause that reduces UM/UIM coverage for certain insureds (often employees) based on some external reference—commonly the employee’s personal auto limits. Subsection (f) was enacted to prohibit that type of reduction in this commercial context.
• Parity requirement (N.J.S.A. 17:28-1.1(f)): Employees cannot receive less UM/UIM coverage than the policy’s named insured receives under the same policy.
• Certified questions: A federal appellate court can ask a state supreme court to resolve unsettled state-law questions that may determine the outcome of the federal case.
• Reformation: A remedy rewriting policy terms to conform to law. The Court’s interpretation limits reformation under (f) to ensuring parity at the policy-selected UM/UIM limit, not rewriting UIM up to liability limits.

5. Conclusion

Craig Chiaccheri v. Zurich American Insurance Company cements a decisive construction of N.J.S.A. 17:28-1.1(f): employees covered by a corporate commercial auto policy are entitled to the “maximum…UIM coverage available under the policy,” meaning the UIM limit the employer actually purchased—not the higher third-party liability limit. The decision preserves the Legislature’s post-Pinto objective (eliminate step-downs and enforce parity) while maintaining the broader statutory scheme that allows insureds to choose UIM limits within the statutory floor and ceiling. The Court also aligns public policy with the statute’s expressed design, leaving any move toward mandatory UIM-liability equality to the Legislature.