Uninsured/Underinsured Motorist Insurance

By P. Andersen, 10/17/14

At Levitt-Fuirst, I manage a sub-company called Risk Reduction Services (RRS).   Simply, we collect proof of insurance documents from contractors for our clients.  If there is a claim caused by a contractor, our clients can feel secure that the contractor has insurance to pay the claim.

All of this made me think of personal auto insurance.  When you are in an accident, you expect the other driver to have proper insurance!  Recently, however, I have been reading many stories about individuals that either have only the minimum auto coverage limits, or forego auto insurance entirely.  Reasons vary from the slow economic recovery to increasing auto insurance rates, but whatever the reason, the number of uninsured drivers is climbing. Here is one such story that caught my eye.  Though this is from Dayton Ohio, you could insert your town name and the story wouldn’t change.

Even if that driver in the lane next to you DOES have insurance, however, there is no telling if they have ENOUGH insurance! Do you know how low the New York State’s mandatory limits are?  Mandated liability insurance limits are $25,000/person, $50,000/accident.  Limits for death are $50,000/person, $100,000/accident!  Property damage?  $10,000!!!

Cars are more valuable than ever, and humans are more litigious than ever. These limits will not protect you if you cause an accident, but they will also not care for you if you are involved in an accident caused by others with bad insurance!

What Is a Person To Do?

Two things, both accomplished by calling your insurance expert…

First, make sure you have a good uninsured/underinsured limit. This coverage is the one you need for those occasions where the other driver doesn’t have insurance, or has extremely low coverage limits. Although this is a required coverage in New York, the mandated limits are too low to truly protect you. Talk to your insurance professional to find out if your limits for this essential coverage are high enough.

Second, do you have a lot to protect outside of your car? Do you have an expensive home, vacation home, jewelry, kids with college funds, stock portfolios? If the answers are YES, than the rules are different for you.  You should have an umbrella policy to protect you in the case of a lawsuit or high cost claim.

Do you have an umbrella policy? Yes?  GOOD! But that auto policy better be $500,000 combined single limit, or you may have a large shortfall when that unthinkable auto claim occurs. Most umbrella policies require underlying insurance to be at least $500,000 before the umbrella coverage kicks in. This is one very good reason to keep all of your insurance with one insurance expert – the more you have to protect, the more you need a synergy amongst all of your policies.

Auto Insurance is expensive, especially in the tri-state region. Rates in New York City are especially high, and New Jersey is known for their high rates as well.  The risks to you, your family, and your personal wealth is real, though, and skimping on this essential coverage simply doesn’t make sense.  Give us a call, we are happy to check your policy to see if you are protected from this, and other risks you face each day.