Insurance Brokers Excluded From New Jersey Consumer Protection Act
Plemmons v. Blue Chip Insurance Services, A-0414-04T3, Appellate Division (August 21, 2006). An insurance broker is excluded from liability under the New Jersey Consumer Fraud Act for the performance of brokerage services, the Appellate Division held in a published opinion approved for publication on August 21, 2006.
In this particular case, the plaintiff entered into a contract to purchase residential property in New Jersey, which he planned to convert to commercial use. In anticipation of a closing, plaintiff paid a $361 premium to obtain homeowner's insurance coverage from defendant Blue Chip Insurance, and Blue Chip issued a policy declaration sheet providing for homeowner's coverage. The policy was ultimtely voided because of a delay in the closing date, however Blue Chip never refunded plaintiff his $361 premium.
A new closing date was arranged,and prior thereto an insurance representative with Blue Chip advised plaintiff's representative that plaintiff needed to obtain a business operations policy rather than a homeowner's policy. Plaintiff never paid a premium for a business operations policy, and Blue Chip neither issued a business operations policy nor a homeowner's policy. Consequently, the property was uninsured at the time it was damaged by a storm and by the alleged negligence of contractors who performed work required to convert the property from residential to commercial use. Blue Chip never returned the $361 premium paid by plaintiff and alegedly failed to inform plaintiff that he did not have the coverage that such a policy would have provided.
The full Appellate Division opinion can be downloaded here
In this particular case, the plaintiff entered into a contract to purchase residential property in New Jersey, which he planned to convert to commercial use. In anticipation of a closing, plaintiff paid a $361 premium to obtain homeowner's insurance coverage from defendant Blue Chip Insurance, and Blue Chip issued a policy declaration sheet providing for homeowner's coverage. The policy was ultimtely voided because of a delay in the closing date, however Blue Chip never refunded plaintiff his $361 premium.
A new closing date was arranged,and prior thereto an insurance representative with Blue Chip advised plaintiff's representative that plaintiff needed to obtain a business operations policy rather than a homeowner's policy. Plaintiff never paid a premium for a business operations policy, and Blue Chip neither issued a business operations policy nor a homeowner's policy. Consequently, the property was uninsured at the time it was damaged by a storm and by the alleged negligence of contractors who performed work required to convert the property from residential to commercial use. Blue Chip never returned the $361 premium paid by plaintiff and alegedly failed to inform plaintiff that he did not have the coverage that such a policy would have provided.
The full Appellate Division opinion can be downloaded here
Because insurance brokers are semi-professionals, subject to testing, licensing and regulation by the State of New Jersey they cannot be sued under the Consumer Fraud Act, the Appellate Division concluded.
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