Underinsurance Car Accident
For many, purchasing car insurance seems like a simple task. The insurance companies claim to provide it all, State Farm your friendly neighbor, Your in good hands with Allstate, contact GEICO and in 15 minutes save 15%. The catch phrases go on and on. So you choose one and believe you are getting "full coverage" and pay the premium.
Sadly, it is when you need that same insurance company who made you all the promises to be there, to be there, that you learn that the policy doesn't necessarily protect you, those who live with you from serious accidents caused by others.
One line item to seriously consider is Underinsurance Coverage. This is not the liability coverage, nor the collision coverage, or the medical payment part called No-Fault.
Underinsurance coverage provides coverage to you, and any relative living in your household for personal injuries should someone else cause an accident and they have less insurance coverage than you. This seems like a no brainer and when you purchase your policy you look at that top line called "Liability Coverage". This is the line that provides the amount of coverage that one can seek to recover from you should you injure someone else or cause an accident causing injuries.
HOWEVER, this line does not provide the same level of coverage or the same amount for Underinsurance Coverage unless you request this from the carrier; who from our experience will often give you the minimum Underinsurance coverage despite you paying for significant or more liability coverage.
So the consult often goes like this. A client comes to our office with a serious injury. They provide police report and bring their insurance policy. Immediately we see that the policy they purchased and spent their hard earned dollars on, provides for $100,000/300,000 liability coverage. They think this is great. It is good for someone making a case against you. We discuss that we must look at the Underinsurance coverage to see what their carrier gave them, despite the fact that they can always have coverage equal to that $100,000/300,000.00. We glance down and see full collision, $50,000 for no-fault or medical bills. We then get to Underinsurance and they have $25,000/50,000.00 written. They ask "what does this mean". I explain that sadly their insurance company has given them the New York minimum for Underinsurance despite them paying for the $100/300k liability. They are shocked. What does this mean???
It means that if the responsible car has $25,000 in coverage (their Liability line) my client can not get anymore money from their own policy despite having $100,000 in liability coverage themselves; THE $25,000/50,000 has eliminated that possibility. Under the law, you can collect from Underinsurance if the amount of your Underinsurance coverage is greater than the responsible car's liability coverage. And you can only collect up to the total of your Underinsurance coverage. So here as both the responsible car is $25,000 and my client's Underinsurance is $25,000 they have no further recovery. To add insult to injury, the cost to have your carrier raise your Underinsurance to equal your liability is usually no more than $20 a year. YES IT IS BASICALLY FREE. YOU HAVE TO JUST ASK...
The partner's and associates at Leav & Steinberg, LLP have lobbied for our government in New York to make the amount given for Underinsurance always equal to your liability. Customers should be given the equal amount if they are paying for it. If they then choose to reduce it that is for them to decide, not the carrier who seems to only care about profit.