Too often people are injured by motorists who are drastically under-insured or not injured at all causing a crisis. Here is such a scenario and a means to prepare and avoid such a pitfall:

I was sitting in my car while stopped at a red light when another car rear ended mine. My leg was badly broken and I needed extensive surgery. I underwent a lengthy recuperative period with many months of physical therapy. I have been incapacitated from my employment for two years.

During the course of litigation it was learned that the defendant car owner had a  $25,000 insurance policy. Knowing that the defendant is of modest means, my attorney has advised me to accept this sum despite the extensive injuries I suffered. What should I do?

Unfortunately, circumstances like yours occur all too often. In New York, it is legal to operate a vehicle with as little as $25,000.00 of liability insurance.If the defendant has no other applicable policies and/or excess (umbrella) coverage, proceeding to verdict will likely be fruitless. In fact, after the expenses of trial are added, you may actually receive less that you would have had you accepted the settlement offer. Unless the defendant has sufficient assets to satisfy a substantial verdict or earns significant wages which may be garnished, proceeding to verdict at trial will likely be nothing more than an exercise in futility. In fact, if the no-fault benefits are also exhausted, an accident victim can frequently be left in debt.

However, the good news is that it is relatively simple and inexpensive to protect yourself and your family. Every motor vehicle insurance policy in New York carries liability, no-fault (PIP) benefits and an uninsured/underinsured provision. Typically, we only pay attention to the liability portion of our policy. We are so afraid of being sued that we often purchase far more liability insurance than the minimum amount required by law. We all pay a pretty price for the peace of mind of knowing that if we are sued, we have a big insurance policy behind us. The resulting increase in our premiums is substantial. Naturally, because of this large increase in premiums, the insurance brokers and agents encourage us to buy this additional liability coverage, as we should.

However, very few of us ever consider raising the amount of the no-fault or uninsured/underinsured motorist coverage which we carry in our policy or the no- fault portions of our policy and they nearly always remain the minimum allowed by law. AND REMEMBER, these portions of our policies may actually pay money directly to us when we are injured in an accident. There are two reasons for this –
a lack of knowledge and understanding on our side and the fact that there is a minimal increase in premiums to raise these areas of coverage so the insurance people don’t encourage us to buy.

Uninsured coverage is applicable when we are involved in an accident with a hit and run vehicle, an uninsured vehicle (which is far, far more common than you would imagine) or a vehicle whose insurance carrier issues a disclaimer. If you are injured in an accident caused by such a vehicle, you would turn to your own insurance policy for compensation for your pain and suffering. Likewise, if the owner of the vehicle which caused the accident has insurance, but it is insufficient to compensate you for your injuries, the underinsured provision of your own policy is employed to make up the difference between the policy carried by the offender and that amount that properly compensates you for your injury. This, however, is only the case when the extent of “underinsurance” coverage exceeds the coverage on the capable driver’s vehicle and your own liability coverage must match or exceed your uninsured coverage. As an example, if one had $250,000 of applicable “underinsurance” coverage and a defendant has only $25,000 liability coverage, recovery by such a litigant could be obtained by accepting the first $25,000 from the defendant’s insurance carrier and obtaining the remainder from your own carrier up to $225,000 (“underinsurance” of $250,000 – defendant’s liability coverage of $25,000).

The cost of increasing the “uninsured/underinsured” coverage is minimal and its benefits can save you from financial ruin if a catastrophic injury occurs. Similarly, a small increase in your insurance premiums for additional no-fault coverage is critical so that all of your medical and hospital bills as well as your lost earnings (to the extent allowed) are compensated when you are involved in an accident. REMEMBER, this is money for you, not the other guy and the cost is surprisingly low.

Protect yourself and your loved ones NOW. Contact your broker immediately and arrange for an increase of your “uninsured/underinsured” and your no-fault coverage so that should you or a loved one be injured in a motor vehicle accident, adequate coverage could be available.

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