39:6-48. Form of liability policy; provisions to which it is subject; binders; indorsements

No motor vehicle liability policy shall be issued or delivered in this State, as proof of financial responsibility, unless such policy discloses the name, address and business of the insured, the coverage afforded by the policy, the premium charged therefor, the policy period, the limit of liability and the agreement that the insurance thereunder is provided in accordance with the coverage defined in sections twenty-four and twenty-five of this act and in this section and is subject to all of the provisions of this act.

The motor vehicle liability policy shall be subject to the following provisions which need not be contained therein:

(a) The liability of a company under a motor vehicle liability policy shall become absolute when loss or damage covered by the policy occurs and the satisfaction by the insured of a final judgment of the loss or damage shall not be a condition precedent to the right or duty of the carrier to make payment on account of the loss or damage. No such policy shall be canceled or annulled as respects any loss or damage by any agreement between the carrier and the insured after the insured has become responsible for the loss or damage and any such cancellation or annulment shall be void. Upon the recovery of a final judgment against a person for the loss or damage if the judgment debtor was at the accrual of the cause of action insured against liability therefor under a motor vehicle liability policy, the judgment creditor shall be entitled to have the insurance money applied to the satisfaction of the judgment. The policy may provide that the insured or a person covered by the policy shall reimburse the company for payments made on account of an accident, claim or suit involving a breach of the terms, provisions or conditions of the policy; and, if the policy provides for limits in excess of the limits designated in this section the insurance carrier may plead against the judgment creditor, with respect to the amount of the excess limits of liability any defenses which it may be entitled to plead against the insured. The policy may further provide for the prorating of the insurance thereunder with other applicable valid and collectible insurance.

(b) The policy, any written application therefor and any rider or indorsement which shall not conflict with the provisions of this act shall constitute the entire contract between the parties.

Effective as of the date such proof is furnished and to the extent of the coverage required by this act and to the extent of the limits of liability specified in section twenty-four of this act, any policy of motor vehicle liability insurance furnished as proof of financial responsibility pursuant to section eighteen of this act, either by the filing of a certificate signed by a duly licensed agent of the company issuing the policy as provided in the said section, or otherwise, shall be deemed amended to conform with and to contain all the provisions required by this act, any provision of the policy or certificate to the contrary notwithstanding.

An insurance carrier authorized to issue motor vehicle liability policies as provided for in this act may, pending the issuance of the policy, execute an agreement, to be known as a binder; or may, in lieu of the policy, issue an indorsement to an existing policy, each of which shall be construed to provide indemnity or protection in like manner and to the same extent as the policy. The provisions of said sections twenty-four and twenty-five and this section shall apply to the binders and indorsements.

L.1952, c. 173, p. 566, s. 26.