It is incumbent upon all operators of motor vehicles within the State of New York to make sure that their vehicles have the requisite coverage in liability situations. This includes not only bodily injury coverage, but also coverage for property damage. These items are mandatory under the New York Insurance Law. The current minimum for liability coverages are 25/50/25. These are interpreted as $25,000 for one person in an accident; $50,000 for two or more people per accident; and $25,000 in property damage coverage. It must be recognized that these are minimum levels of coverage.
Additionally, under the no-fault scheme there is a requirement for $50,000 of basic no-fault coverage (PIP coverage). There can, however, be a deductible on a no-fault policy. There is also a requirement under a minimum policy for there to be $25,000 of uninsured motorist (UM) coverage.
The law of New York is clear that it is the owner/operator’s responsibility to know the liability limits that have been sold to them by the insurance company.
It is recommended that the owner of a motor vehicle today carry more than the mandatory minimum limits. Appropriate limits are defined by the need for coverage. However, given the price of cars today one can envision that $25,000 in property damage coverage for an at-fault accident is below that which would be paid for property damage to an expensive vehicle.
There are three optional coverages which the owner should consider. The first is so-called supplemental underinsured motorist protection, or “SUM” coverage. SUM coverage deals with a situation where there is liability and a serious injury caused to the operator of a vehicle and the offending vehicle has insufficient bodily injury coverage for the injuries sustained. In that situation the injured party would look to their own insurance coverage under the SUM coverage for protection. It is our view that the SUM limits should always match the bodily injury limits available on the vehicle. It is important to note that SUM coverage must be both requested and a premium paid for that coverage. Importantly, there is a dollar for dollar off-set for the recovery received from the offending vehicle. Thus, for example, if the offending vehicle had a minimum $25,000 policy and the injured party had $100,000 in SUM coverage, the maximum amount available under the injured party’s SUM coverage would be $75,000.
A second coverage that can, and should, be purchased is so-called spousal liability coverage. This is a recent addition to the insurance regulatory scheme in New York. Before this coverage became available, if a spouse was negligent while operating a vehicle and caused injury to the other spouse, there was no insurance coverage available. That situation has now been remedied in that an owner of a vehicle can purchase coverage for spousal injury. That too, must be purchased specifically and a premium paid. This coverage is not afforded under the basic liability policy.
One should also consider purchasing so-called additional personal injury protection or “APIP”. This amount is beyond basic no-fault and can provide for greater medical coverage, greater lost wages, and other protections not available with the basic so-called no-fault/PIP policy.
The client, and for that matter the attorney, should always check their policy on every renewal to ensure that the coverages that they wish to have are available to them and are shown on the declarations page of the policy. If the coverages are omitted or not at the limits that the insured wishes to have, they should immediately contact their agent and make sure that the coverages are in place.
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