Your New York State car insurance policy includes various different types of coverage to protect you in the event of an accident. Most of this coverage protects you from liability to others; that is, it pays against the claims of other motorists when you are at fault in the accident. It does not, however, pay you for your own damages (except for basic expenses such as medical expenses and lost wages incurred). When one or more other motorists are at fault, your are paid by the insurance policy of these motorists. But what if the other motorists have little or no insurance, or the other motorists leave the scene of the accident and are never found? In such a situation, there may exist no means of compensating you for your pain and suffering or ongoing lost wages, both of which typically constitute the vast majority of total damages incurred by individuals in automobile accidents.
This is why Supplemental Underinsured Motorist and Uninsured Motorist (“SUM/UM”) coverage is so important. SUM/UM covers you and relatives with whom you reside up to the amount of coverage you purchase, in the event another motorist at fault in the accident has inadequate insurance or leaves the scene of the accident.
For example, assuming you incurred $100,000 in pain and suffering in a car accident with an at-fault defendant who purchased an insurance policy having only the New York State minimum liability coverage of $25,000. Without SUM/UM coverage, you would be able to recover at most $25,000 from the defendant’s insurance company, with the remaining $75,000 in damages being unrecoverable from your own insurance provider, as well as from the at-fault defendant (who, by virtue of purchasing a policy with minimum coverage, likely owns no personal assets which could satisfy the $75,000 deficit). However, if your insurance policy included a $100,000 SUM/UM policy, you could recover the remaining $75,000 from your own insurance company, even though the defendant was at fault!
WHY DOESN’T EVERYONE PURCHASE ADQUATE SUM/UM COVERAGE?
SUM/UM coverage is critical to ensure that you are adequately covered in the event of an accident. The coverage is also very inexpensive, usually increasing premiums by only pennies a day. So why do a substantial number of New York motorists fail to include adequate SUM/UM coverage limits in their policies? Blame your insurance company/agent. Insurance companies make money when they collect premiums, not when they pay out claims to injured policy holders. The additional premiums these companies receive for SUM/UM coverage are minimal and often times do not adequately offset the claims made by policy holders with SUM/UM coverage. For this reason, insurance companies may be incentivized not to educate their policy holders on SUM/UM coverage and/or to set default SUM/UM coverages to inadequate amounts in the hopes that policy holders will not elect to increase the coverage.
The bottom line is don’t count on anyone else to protect you — protect yourself and your family by making sure you have the maximum SUM/UM benefits available to you by your insurance company. In the event the need arises, you will be glad you have the benefit available.
If you have any questions please call our office and we will be happy to assist you.