I Hate Giving People Bad News

One of the more unpleasant things I must do as a lawyer is give a client bad news. This is particularly true when the client or a loved one has been badly injured in a car accident, and then we find out that the driver of the car that caused the crash either had no insurance or the minimum required by law in New York. Telling the parent of a child that has severe and permanent injuries that the responsible driver only had $25,000 worth of insurance is not a pleasant way to spend an afternoon.

The good news is that such a scenario would have been avoided if the client had purchased adequate Supplementary Underinsured/Uninsured Motorist Coverage (SUM coverage) on his own auto policy. SUM provides coverage from YOUR insurance policy to protect YOU and your passengers in the event that the other driver is driving illegally (without any insurance) or driving with policy limits that are not high enough to cover your damages (underinsured drivers).

Why is SUM coverage so important? Because so many people drive without insurance and because so many people drive with the minimum liability insurance required in New York of $25,000/$50,000. What does this mean? It means that if a drunk driver crashes in to you, the most his insurance company will be required to pay any one person injured in the accident is $25,000, and the most they would be required to pay for all persons injured in that accident is $50,000.

Of course, people can purchase more than the minimum amount of liability insurance, and I think drivers who don't are nuts! Unfortunately, it has been my experience over the last seventeen years that the worst drivers carry the least amount of insurance!! That's right- the guy with three DWIs and four accidents usually has no insurance or $25,000/$50,000 coverage. And sadly, there is no law that says the worst drivers have to carry more insurance to protect the rest of us. So, if you and your spouse and two kids are all badly injured by the drunk driver with $25,000/$50,000 coverage, the absolute maximum the drunk's insurance company would have to pay your family is $50,000. While that may sound like a lot, $50,000 is NOTHING when a day's stay in the ICU can cost $18,000, and it is NOTHING if you are out of work for six months.

What can you do to protect yourself? First, you must raise your own liability coverage (the amount your company pays the other guy if you are at fault and cause the accident), and then purchase the maximum amount of SUM coverage. The kicker is that your SUM coverage cannot exceed your own liability coverage, which is why you must first increase your liability coverage. Yeah, I know you don't like paying insurance bills, and neither do I. However, I happily pay my auto insurance bill because I know how critically important SUM coverage is, because numerous times I have witnessed firsthand the tragedy of what happens when someone is maimed by an uninsured or underinsured driver. And besides, SUM coverage is the least expensive auto insurance you will ever buy.

So how does this work? Let's say that you have done the smart thing and increased your liability coverage from $100,000 to $300,000, and then also purchased SUM coverage in the amount of $300,000. Now, if you get in that accident caused by the drunk driver with $25,000 worth of insurance, you can get an additional $275,000 from your own insurance company. Not bad for what is probably less than a couple of hundred dollars per year in increased insurance costs. Now, don't take the attitude that it will never happen to you or your family, because it could, and does happen to families DAILY throughout New York (even right here in Livingston County). And besides, I don't wish to ruin another afternoon explaining to you why your loved one will only get $25,000 for the terrible wreck they were in.

I know talking about and thinking about insurance is as fun as watching paint dry. If you like, you can send me the declarations page from your auto policy and I will review it for you (for free), and I will let you know if I think you need to increase your coverage.

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