According to GEICO, its online application advised applicants of the requirement to have the vehicle inspected within seven days of the policy's effective date and suggested garage locations for inspection based on the policy zip code.

Mr. Gibbins did not complete the required physical inspection of his vehicle.

On November 16, 2013, his vehicle sustained significant damage when he swerved off the road. He called GEICO to report the accident the same day and he claimed that GEICO's employee told him everything “looks good” and that GEICO would “assum[e] full responsibility for the loss.”

On November 18, 2013, one of GEICO's employees in its claims department sent Mr. Gibbins an email acknowledging receipt of his claim. The email stated:

[T]here are coverage issues on the file to be resolved and we are looking for a copy of the police report in order to resolve everything. Please let me know once you have been able to obtain the police report so that I can complete the coverage investigation on your claim.

On November 26, 2013, GEICO's Inspection Unit mailed Mr. Gibbins a letter entitled “NOTICE OF SUSPENSION OF PHYSICAL DAMAGE COVERAGE.” The letter stated that his comprehensive and collision coverage was suspended on November 9, 2013 due to failure to comply with the physical inspection requirement per N.J.A.C. 11:3-36.3 and -36.7.

On December 4, 2013, GEICO denied Mr. Gibbins' claim for property damage.

Mr. Gibbins asked GEICO for proof showing that GEICO had advised him of the physical inspection requirement.

GEICO mailed him a copy of a notice dated November 1, 2013 that stated:

[W]e would like to remind you to complete [two] important state requirements.

1. NEW JERSEY STATE-MANDATED PHOTO INSPECTION New Jersey State Law requires you to have a photo inspection of your vehicle completed at an authorized location. This is not the same as the emissions inspection done at the Motor Vehicle Commission.

FAILURE TO COMPLETE THIS MANDATORY INSPECTION WILL RESULT IN THE REMOVAL OF COMPREHENSIVE AND COLLISION FROM YOUR VEHICLE.

The notice stated, “IMMEDIATE ACTION REQUIRED TO AVOID LOSS OF INSURANCE COVERAGE” and informed Mr. Gibbins of the requirement that the inspection be completed by November 8, 2013 or else the coverage would be suspended on November 9, 2013 at 12:01 a.m. GEICO provided the mail certification for the November 1, 2013 notice, but Mr. Gibbins claimed he had never received the November 1, 2013 notice and that the first time he had seen it was when GEICO mailed it to him after the accident.

Mr. Gibbins sued GEICO. Among other things, he alleged that the online application he completed had not advised him of the physical inspection requirement.

GEICO moved for summary judgment. Among other things, it provided a screenshot of an example application showing the notification. The screenshot showed the application language stating, “[b]y clicking the continue button below, I acknowledge the vehicle must be inspected within [seven] calendar days from [application date]. Failure to complete the inspection will result in both comprehensive and collision coverage being removed from my vehicle.”

GEICO indicated that Mr. Gibbins would have had to click the “continue” button to complete the application.

The trial court granted the insurer's motion, and Mr. Gibbins appealed. He argued that:

- GEICO was required to contemporaneously notify him of the inspection requirement when he completed the online insurance application;

- GEICO was required to mail him a notice of inspection form;

- GEICO had violated N.J.A.C. 11:3-36.5(c)(2) by failing to advise him of the mandatory physical damage inspection when he completed the online application on October 31, 2013.

New Jersey Law

N.J.S.A. 17:33B-34(a) states:

A newly issued policy shall not provide coverage for automobile physical damage perils prior to an inspection of the automobile by the insurer.

N.J.A.C. 11:3-36.5(a) allows an insurer to delay the mandatory inspection:

for seven calendar days following the effective date of coverage, upon an insured's requests for coverage for automobile physical damage insurance.

The insurer must provide the insured with a:

Notice of Inspection in the form set forth in Appendix B or an Acknowledgement of Requirement for Insurance Inspection as set forth in Appendix A

that both outline the deadlines for the inspection and warn about losing coverage. N.J.A.C. 1:3-36.6(d).

The Appellate Court' Decision

The appellate court affirmed.

In its decision, the appellate court pointed out that GEICO had provided the post office certification that the November 1, 2013 notice had been mailed. It also noted that although GEICO had not provided a copy of Mr. Gibbins' exact online application, it had provided an example application with the warning that the applicant must have the vehicle inspected in seven days.

Therefore, the appellate court ruled, GEICO had complied with the law's mandatory inspection notice requirements, and its suspension of coverage had become effective at 12:01 a.m. on November 9, 2013 – before the accident.

The case is Gibbins v. Government Employees Ins. Co., No. A-1035-15T3 (N.J. Ct.App. March 14, 2017). Attorneys involved include: John P. Graves argued the cause for appellant. David T. Robertson argued the cause for respondent (Harwood Lloyd, L.L.C., attorneys; Mr. Robertson, of counsel and on the brief).