Since a large part of my practice involves personal injury matters, I often encounter clients with severe injuries. Unfortunately, I also often encounter clients who are woefully underinsured and by the time I tell them what coverage they should have bought it is too late. Too often our focus in purchasing insurance is only upon the liability coverage amounts. After all we buy insurance to protect us if we negligently harm others, right? True, but focusing on only the liability coverage leaves you vulnerable if you are the one who is injured by someone else’s negligence.
The most common problems I see are related to “Supplemental Uninsured / Underinsured Motorist” (SUM) coverage and Spousal coverage. SUM coverage comes into play if you are injured in an auto accident and the other driver has little or no coverage. Drivers are required to carry insurance of at least $25,000 in New York. How long would $25,000 last you if you were out of work for an extended time? If you purchase SUM coverage, you can make a claim under your own insurance policy if you are badly injured and the other driver has little or no liability insurance.
NY law requires that all auto policies provide SUM coverage in the amount of $25,000. However, since SUM coverage only kicks in to bring the total insurance available to the level you have purchased, the $25,000 amount would only be available if the other driver had no insurance at all. For example, if you have the minimum SUM coverage of $25,000 and the other driver has a $25,000 policy, you get no additional coverage. If you were to purchase $100,000 in SUM coverage and the other driver has 25,000 in coverage, you would have an extra $75,000 of insurance available to make a claim upon if you have serious injuries. I recommend that my clients purchase as much SUM coverage as their own liability limits. If you have $100,000 in liability coverage, I recommend you carry 100,000 in SUM coverage.
Spousal coverage is something most people have never even heard of. Every auto policy in New York contains an exclusion for injuries caused by the negligence of a spouse. If a husband is driving with his wife as a passenger and his negligence causes her devastating injuries, she cannot make a claim for his negligence.. The purchase of spousal coverage would allow the spouse to make a claim for her injuries that would be covered under the liability policy.
For example: Husband and wife are traveling by car for a family vacation. The Husband is driving the car and falls asleep at the wheel striking a tree. The wife is killed. Husband is a stay at home father, caring for 4 children. His wife had a very successful career and was the sole bread-winner. Although the couple had a million dollars of liability coverage, they had not purchased spousal coverage. The husband and children will get only a small death benefit available under their policy. Had they purchased spousal coverage, husband could make a claim under their auto policy for the benefit of the children.
A colleague who recently took my advice on this topic told me it cost him less than $50 per year to add both coverages to his policy. Please take a few extra moments to look at your own policies to make sure you have adequate coverage.