People don't realize there is much more to auto insurance than finding the company with the lowest premium. You must be prepared for many contingencies. Here are some of them:
What happens when you are in an accident and the vehicle at fault has no insurance? Although New York State law mandates that all motor vehicles maintain liability insurance coverage, we all know that many uninsured vehicles operate on our roadways. So what happens when an uninsured vehicle plows into your car from behind causing a broken leg which requires surgery with metal rods and screws to repair the damage? You can't collect insurance money from the uninsured vehicle. The simple answer is that your automobile liability policy automatically includes uninsured mo-torist coverage to protect you in such an event. You may file a claim against your insurance company to pay for your pain and suffering damages. Making such a claim should not cause your insurance rates to rise.
How much money can you collect for your pain and suffering, lost wages etc., while making an uninsur-ed motorist claim against your own policy? This is all determined by the amount of uninsured coverage you maintain on your policy. Again, this coverage is mandatory in the State of New York. However, this coverage is only mandatory for $25,000.
This amount is quite insufficient if you suffer serious injuries. You should maintain a much larger policy to protect yourself. You may purchase uninsured protection equal to the amount of your liability protection. If you maintain a $500,000 liability policy (which you should, at a minimum, if you own any assets) you are eligible to purchase up to $500,000 in uninsured protection.
The cost of this additional protection is low compared with the overall cost of your policy. Additionally, this coverage protects you and any family members who live with you even if your car is not involved in the accident. For example, if you are a pedestrian crossing the street when you are hit by a car which is uninsured, you can make a claim against your insurance policy.
What happens if the at fault vehicle has minimal insurance which is inadequate to pay for your damages? State law only mandates that automobiles are insured to a minimum of $25,000. The easiest way to protect yourself in this scenario is to maintain a large underinsured provision on your insurance policy. Underinsured coverage allows you to make claims against your policy for your injuries in excess of the offending vehicle policy limits.
In our fact pattern, you could collect $25,000 from the offending vehicle. Any damages you sustain above that amount you can claim against your own policy up to the limits of your un-derinsured clause. The total you can collect is reduced by the amount maintained by the offending vehicle. So if the offending vehicle maintains $25,000 and you maintain $300,000 in underinsured co-verage, you will be eligible to collect up to $25,000 from the offending vehicle and after that, up to $275,000 from your insurance company.
The benefits of underinsured motor-ist protection are very similar to those of underinsured protection.
Next month we will review other insurance issues, such as: What happens if you are at fault in an accident? What are your responsibilities and potential liabilities? Should you maintain an umbrella policy? Make sure you discuss uninsured/underinsured protection with your insurance broker.
Larry Hoffman serves "of counsel" to Sanders, Block, Woycik, Viener and Grossman, one of the largest plaintiff's negligence firms in the state. Please feel free to submit legal questions or comments to him at lhoff26@aol.com.