On January 10, 2018, plaintiff Amy Vanrell was driving a motor vehicle covered by an insurance policy with USAA and was in an accident. She sued the other driver for her injuries but failed to make a claim against her insurance company, USAA, for underinsured motorist coverage until May 2, 2022. The issue in Vanrell v. United Services Auto Assn., 2025 N.J. Super Unpub. LEXIS 1479 (App. Div. Aug. 6, 2025) was whether plaintiff failed to timely file an underinsured motorist claim under the terms of her insurance policy.
The other driver (the tortfeasor) involved in the accident had limited liability coverage of $50,000 per person/$100,000 per accident. Plaintiff’s insurance policy with USAA provided underinsured motorist coverage (“UIM”) for bodily injuries of up to $300,000 per person/$500,000 per accident.
The day after the accident, on January 11, 2018, plaintiff notified USAA of her claim for property damages and personal injury protection benefits. While she filed suit against the other driver on December 23, 2019 for her injuries, she failed to notify USAA of her suit at the time it was filed.
The first communication she had with USAA concerning an underinsured motorist claim was on May 2, 2022, when she sent USAA a letter seeking permission to settle her claims against the other driver for $43,000 (a “Longworth” letter). In that letter, she identified the tortfeasor (the other driver) as an underinsured motorist and provided the name and docket number of plaintiff’s suit against the tortfeasor.
In her Longworth letter, she requested permission to settle her claims against the tortfeasor and asked whether USAA wished to waive subrogation of its claims against the tortfeasor. USAA responded on May 4, 2022, approving the request to settle and waiving a potential subrogation claim but did not guarantee that the UIM coverage had been triggered by that loss.
On the day after, plaintiff’s counsel wrote to USAA demanding its $300,000 policy “to amicably resolve this matter.” Thereafter, there were a number of correspondences back and forth in which USAA was asking for medical records to evaluate plaintiff’s settlement demand. On February 24, 2023, USAA did offer to settle plaintiff’s UIM claim for $85,000. However, plaintiff rejected that demand. Eventually, USAA increased its offer to $100,000 to settle.
On May 17, 2023, plaintiff filed a lawsuit against USAA seeking UIM coverage. USAA filed an Answer, which asserted as an affirmative defense that the complaint was barred by the statute of limitations and plaintiff failed to comply with the terms of the policy. Discovery was thereafter exchanged. Before the close of discovery, USAA moved to dismiss the complaint as untimely under the terms of the policy. It argued that the policy required plaintiff to file her UIM claim within four years after the accident or one year of when she was aware or should have been aware of her UIM claim, whichever was later.
Plaintiff opposed this motion, arguing that the six-year statute of limitations for breach of contract claims applied.
The trial court found that plaintiff did not timely file the complaint but did not specify which of the policy limitation periods applied, either the four year or one year, in reaching its decision. It also did not address plaintiff’s conformity-to-law and equitable estoppel arguments.
This appeal ensued. The plaintiff made the arguments that the six-year statute of limitations applied, that USAA was equitably estopped from raising the timeliness of plaintiff’s complaint, that it waived its timeliness argument by not raising it in its Answer and that the four year period in the policy, if applicable, was tolled until USAA denied UIM coverage.
The Appellate Division noted that the primary issue before the court was which of the two limitations period applied to plaintiff’s UIM claim – the six-year statute of limitations that applies to contract claims or the four-year statute of limitations in the policy.
The Court noted that New Jersey law holds that the six-year statute of limitations would ordinarily apply to insurance actions. However, under New Jersey case law, the courts have found that period may be shortened by the terms of an insurance contract.
The Appellate Division found that the USAA policy contained an unequivocal provision shortening the time period in which plaintiff must file her UIM claims to four years from the date of accident or one year from the date she was aware or should have been aware that she had a UIM claim, whichever was later.
It found that four years from the date of the January 10, 2018 accident would have been January 10, 2022. While plaintiff did not identify the date on which she became aware or should have become aware that she had a UIM claim, she presumably became aware of the extent of her injuries and the limits of the tortfeasor’s insurance coverage while her lawsuit against the tortfeasor was pending in the Law Division. At the very latest, she was aware of her UIM claim on May 2, 2022, when she requested USAA’s consent to settle her claims against a tortfeasor for less than what plaintiff alleged her damages from the accident.
Plaintiff did not file a lawsuit against USAA for the UIM claim until May 17, 2023, which was more than a year and four months after the January 10, 2022 date and fifteen days after May 2, 2023. Therefore, the Appellate Division found that under either prong of the contractual limitations, (either the four-year period or the one-year period), plaintiff’s complaint was untimely.
The Court found that legal precedent has permitted parties to an insurance contract to agree to a shorter limitations period than is provided by the statute. Further, the Court’s review of the record did not reveal any basis on which to apply equitable estoppel to bar USAA from raising the timeliness of plaintiff’s complaint.
The Appellate Division also rejected Plaintiff’s other arguments. Hence, the Court affirmed the trial court’s decision, barring the plaintiff’s uninsured motorist claim due to the failure to comply with the policy’s statute of limitations.
