In New York, you are only required to carry the following minimum auto insurance coverage:
$25,000 per person/$50,000 per accident bodily injury coverage
$10,000 property damage coverage
$25,000 per person/$50,000 per accident uninsured/underinsured motorist (SUM) coverage
$50,000 in Personal Injury Protection (PIP) coverage
What does this mean if you are involved in a motor vehicle accident?
The “bodily injury” portion of your insurance does two things. First, it limits your insurance company’s responsibility to the other party involved in the accident (driver, pedestrian, bicyclist, etc.). Note that this doesn’t necessarily limit the other person’s ability to recover against you – it only limits the amount that your insurance company is responsible to pay towards any settlement or judgment against you.
Second, it limits your insurance company’s obligation to offer you uninsured/underinsured motorist coverage. In general, your insurance company is only required to offer you uninsured motorist coverage up to the amount of your bodily injury limits, so if you have the minimum $25,000/$50,000 coverage for bodily injury, you also only have that same minimum coverage for the uninsured/underinsured motorist part of your policy.
Why is uninsured/underinsured motorist coverage important?
Unlike the bodily injury part of your policy, which is the coverage available to the other person involved in the accident, uninsured/underinsured motorist coverage is the amount that is available to you if the other person does not have enough insurance to cover your damages.
How does it work?
If you have a $25,000/$50,000 policy and you are injured in an accident with a vehicle that has no insurance, or in a hit-and-run accident, then you can file a claim against your own insurance company and recover up to the $25,000 limit of your uninsured motorist coverage.
However, if the other vehicle does have insurance, then the amount available to you from your own insurance company is your uninsured/underinsured motorist coverage MINUS the bodily injury limit of the other person’s insurance. So if you have a $25,000/$50,000 policy, and they also have a $25,000/$50,000 policy, then the only policy you can recover against is the other vehicle’s $25,000/$50,000 policy.
What if you instead purchased a policy with $100,000/$300,000 bodily injury limits and also bought uninsured/underinsured motorist coverage up to those same limits? In that case if you were involved in an accident with another vehicle that only had had a $25,000/$50,000 policy, then you could also potentially recover up to another $75,000 from your own insurance company under the uninsured/underinsured motorist coverage you bought.
As you can see, there are two very good reasons to have a high amount of bodily injury coverage on your auto insurance policy if you can afford it. Not only does it provide you with better protection if you injure someone else in an accident, it allows you to purchase more uninsured/underinsured motorist coverage to protect yourself and your family. In addition, increasing uninsured/underinsured motorist coverage from the minimum is usually a very minimal cost.
Why does my lawyer need my insurance policy information right away?
When pursuing a claim for personal injury arising from a motor vehicle accident it is important that you always have the uninsured/underinsured motorist limits readily available to give to your attorney because there are time limitations in which you must put your insurance carrier on notice that you “may” assert a claim under those provisions of your policy.
In order to be able to make a claim under your policy when involved in a motor vehicle accident with an uninsured vehicle, you MUST provide written notice to your carrier of the intention to do so within a reasonable amount of time or “as soon as practicable”. Failure to do so may preclude you from pursuing a claim under these provisions. Before accepting the claim, the insurance company will require proof that the offending driver was uninsured at the time of the accident or fled the scene of the accident. In a hit and run situation, proof of contact with another car is required to pursue a claim. One reason it important to always obtain a police report, even if the driver left the scene, is that it provides proof of the accident and helps to preserve your ability to make a claim against your own insurance policy if you are injured.
Similarly, you are required as soon as practicable to provide your carrier with written notice of your intention to make a claim under the underinsured motorist provisions of your policy. This may sometimes be difficult to determine if the offending vehicles insurance carrier has not provided you with their policy limits in a timely fashion. Moreover, in order to qualify, you must obtain a “policy limit offer” from the liability insurance carrier of the underinsured motorist who injured you. To do this, you will also need to establish that the underinsured motorist was negligent which will likely require investigation, research, and extensive negotiation. If you settle with the underinsured’ s carrier for anything less than the full policy limits, you will be prohibited from making an underinsured motorist claim.