N.J.S.A. 17:28-1.1(f): “Maximum UM Coverage Available Under the Policy” Means the UM Limit Selected (Not the Policy’s Liability Limit)

Case: Nicky Travieso v. Ciara Crespo (Supreme Court of New Jersey)
Date: August 6, 2026
Author: Justice Patterson (unanimous)

1. Introduction

This appeal arises from a workplace driving accident and a dispute over the amount of uninsured motorist (UM) coverage available to an employee under his employer’s commercial auto policy. Plaintiff Nicky Travieso, an employee of Foulke Management Corporation (Foulke), was injured while driving a Foulke vehicle when struck by an allegedly uninsured driver. Foulke’s insurer, Zurich American Insurance Company (Zurich), issued a policy with $1,000,000 in third-party automobile liability coverage, but only the statutory-minimum UM limit of $15,000 per person—an option expressly selected by Foulke.

The central legal issue was the meaning of N.J.S.A. 17:28-1.1(f), which prohibits certain commercial policies from providing employees “less uninsured or underinsured motorist coverage” than the named insured and deems such policies to provide employees the “maximum” UM/UIM coverage “available under the policy.” Travieso argued that “maximum … available” required UM coverage equal to the policy’s $1,000,000 liability limit. Zurich argued the statute is anti-step-down: it equalizes employee UM/UIM with the named insured’s UM/UIM limits, but does not convert liability limits into first-party UM/UIM limits.

2. Summary of the Opinion

The Court reversed the trial court’s reformation of the policy to $1,000,000 UM and remanded for entry of an order denying plaintiffs’ summary-judgment motion on reformation/damages under N.J.S.A. 17:28-1.1(f) and granting Zurich partial summary judgment on those claims, leaving other statutory bad-faith/consumer claims for further proceedings.

3. Analysis

3.1 Precedents Cited

• Chiaccheri v. Zurich American Insurance Co. (2026). The Court treated Travieso as the UM counterpart to Chiaccheri (UIM). Chiaccheri answered certified questions and held that N.J.S.A. 17:28-1.1(f) bars step-down provisions that give employees less UIM than the named insured, but does not require UIM limits to match the policy’s general third-party liability limits. That framework controlled the statutory interpretation here.
• James v. New Jersey Manufacturers Insurance Co., 216 N.J. 552 (2014). The Court relied on James (as it did in Chiaccheri) for two interpretive anchors: (1) the first sentence of N.J.S.A. 17:28-1.1(f) “prohibits providing an employee with less coverage than the named insured” on a qualifying commercial policy; and (2) the statute can operate through policy reformation “by operation of law” for post-effective-date accidents, a point James discussed in its retroactivity analysis. Plaintiffs invoked James to argue “maximum … available” meant something akin to “available by operation of law,” but the Court read James as consistent with an anti-step-down purpose, not a liability-limit parity mandate.
• Pinto v. New Jersey Manufacturers Insurance Co., 183 N.J. 405 (2005). The opinion notes (through Chiaccheri) that N.J.S.A. 17:28-1.1(f) was enacted “in the wake” of Pinto, which enforced a step-down provision. That legislative backdrop supports the view that subsection (f) targets step-downs rather than rewriting UM/UIM limits to equal liability limits.
• Badiali v. N.J. Mfrs. Ins. Grp., 220 N.J. 544 (2015). Cited to define UM as “mandatory first-party coverage” protecting against injuries caused by uninsured drivers, underscoring the conceptual distinction between first-party UM and third-party liability coverage.
• Mist Pharms., LLC v. Berkley Ins. Co., 263 N.J. 554 (2026); Kocanowski v. Township of Bridgewater, 237 N.J. 3 (2019); AC Ocean Walk, LLC v. Am. Guar. & Liab. Ins. Co., 256 N.J. 294 (2024). These cases supplied standards of review: de novo review of summary judgment, statutory interpretation, and insurance contract construction.

3.2 Legal Reasoning

(a) Correcting the premise: the policy did not give the named insured $1,000,000 in UM.

A key feature of the Court’s analysis is that it first dismantled the trial court’s factual/contractual premise. The trial court believed the “business has a policy of a million dollars” in UM for itself but only $15,000 for employees. The Supreme Court found the Zurich policy “makes clear” that UM for the named insured and employees was the same: $15,000 per person, consistent with N.J.S.A. 17:28-1.1(a) minimum limits then in effect. The $1,000,000 figure came from the policy’s third-party general liability/auto liability limits—“clearly distinct” from UM limits.

(b) Reading N.J.S.A. 17:28-1.1(f) as an anti-step-down rule, not a liability-limit parity mandate.

The Court then construed N.J.S.A. 17:28-1.1(f) through the lens of Chiaccheri. Two sentences do the work:

• Sentence 1 (non-diminution): a qualifying commercial auto policy “shall not provide less uninsured or underinsured motorist coverage for an [employee] than the coverage provided to the named insured.”
• Sentence 2 (deeming clause): such a policy “shall be deemed to provide the maximum uninsured or underinsured motorist coverage available under the policy” to the employee.

Plaintiffs argued “maximum … available” should be read to mean “maximum permitted by law,” effectively importing the $1,000,000 liability limit. The Court rejected that construction (again tracking Chiaccheri) because:

• The statute’s plain language ties “maximum” to what is “available under the policy,” not to what is “available under the law.”
• The legislative history (as described in Chiaccheri) reflects a targeted fix for step-down provisions after Pinto, not a broad mandate that businesses purchase UM/UIM up to liability limits.
• The Legislature “could easily have prescribed” a requirement that UM/UIM equal liability limits, but did not.

(c) UM and UIM are treated identically in subsection (f).

The Court’s decisive move was statutory symmetry: because subsection (f) “draw[s] no distinction between UM and UIM coverage,” the UIM interpretation in Chiaccheri “also applies in the UM setting.” Thus, “maximum UM coverage available under the policy” equals the UM limit the employer selected for the named insured—in this case, $15,000.

(d) Compliance and public policy.

The Court concluded the Zurich policy complied because (1) the UM limit met the minimum requirements of N.J.S.A. 17:28-1.1(a) and (b), and (2) the policy gave employees and named insureds the same UM limit, satisfying N.J.S.A. 17:28-1.1(f). Therefore, the UM provisions did not violate the statute or New Jersey public policy.

3.3 Impact

• Clarifies “maximum … available under the policy” in employee UM claims: employees on commercial policies are entitled to parity with the named insured’s UM/UIM limits, not parity with the policy’s third-party liability limits.
• Limits reformation claims seeking liability-limit UM/UIM: absent a true step-down (employee receiving less UM/UIM than the named insured) or noncompliance with statutory minimums, courts should not reform UM/UIM to match liability limits under N.J.S.A. 17:28-1.1(f).
• Encourages careful underwriting and procurement: employers retain the choice (within statutory constraints) to buy higher UM/UIM limits, but the decision signals that selecting minimum UM/UIM limits will also cap employees’ first-party recovery under the employer’s policy.
• Reduces doctrinal divergence between UM and UIM litigation: by expressly importing Chiaccheri into the UM context, the Court provides a unified interpretive rule for subsection (f).
• Practical litigation consequence: parties will likely focus future subsection (f) disputes on whether a policy in fact creates unequal UM/UIM limits (a step-down) or fails to meet N.J.S.A. 17:28-1.1(a)/(b), rather than on comparisons to third-party liability limits.

4. Complex Concepts Simplified

• UM (Uninsured Motorist) coverage: first-party coverage that pays the insured (or covered person) when the at-fault driver has no liability insurance. (The Court quoted Badiali v. N.J. Mfrs. Ins. Grp. to describe UM as “mandatory first-party coverage.”)
• UIM (Underinsured Motorist) coverage: first-party coverage that may apply when the at-fault driver has insurance, but not enough to fully cover the damages.
• Third-party liability limit vs. first-party UM limit: a liability limit (here, $1,000,000) is what the insurer will pay to others who sue the insured for the insured’s negligence; a UM limit (here, $15,000) is what the insurer will pay to covered persons injured by an uninsured driver.
• Step-down provision: a policy term that “steps down” coverage for certain insureds (like employees) to a lower limit than what is provided to the named insured. N.J.S.A. 17:28-1.1(f) is aimed at preventing that unequal treatment in the commercial policy context.
• Reformation “by operation of law”: a court-imposed correction of policy terms to conform to statutory requirements. Here, reformation to $1,000,000 UM was rejected because the policy already met the statute and did not treat the employee worse than the named insured.

5. Conclusion

Nicky Travieso v. Ciara Crespo cements a clear rule for commercial auto policies under N.J.S.A. 17:28-1.1(f): the “maximum” UM coverage “available under the policy” for an employee is the UM limit the employer actually selected for the named insured, not the policy’s third-party liability limit. Consistent with Chiaccheri v. Zurich American Insurance Co., the statute functions as an anti-step-down safeguard—ensuring equal UM/UIM limits between employer (named insured) and employee—without transforming liability limits into mandatory first-party UM/UIM limits. The decision narrows the circumstances in which policy reformation is appropriate under subsection (f) and provides a unified framework for both UM and UIM disputes in New Jersey.