Driving without car insurance is illegal in almost all states. Insurance protects you, and others, from financial ruin in the event of an auto accident. In addition, it can come to the rescue if your car is vandalized, damaged by fire or stolen — depending on your policy. Besides protecting you financially, car insurance is a social responsibility. Driving without insurance or the ability to pay for the damages you cause in an accident puts others at financial risk. That’s why all states (except New Hampshire) require drivers to carry liability insurance, according to the Insurance Information Institute.
1. Bodily injury liability
2. Property damage liability
3. Medical payments or Personal Injury Protection (PIP)
6. Uninsured/Underinsured motorists coverage (UM/UIM)
7. Extras, like roadside assistance
Liability coverage limits (that’s for the damage you do to others) are written as three numbers, such as 25/50/10. That translates to $25,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident and $10,000 in property-damage coverage per accident.
States require certain levels of minimum liability insurance because it’s coverage that pays for damage you do to others — including bodily injury and property damage. It also pays for your legal bills if you cause an accident. In New York State, the minimum level of liability insurance required by law is 25/50.
Bodily-injury liability applies to damages you cause to others. It covers their medical bills and lost wages. Property-damage liability pays to repair or replace property that you destroy. This includes other cars or property, such as fences. It can also pay for “pain and suffering” damages if someone sues you after a car accident — but only up to your liability limits.
However, your financial responsibility may exceed your liability limits. If you cause $65,000 worth of damage and have an insurance limit of $40,000, you’re responsible for the remaining $25,000 and could be sued for it.
Medical payments (called MedPay) coverage pays for the medical expenses suffered by you and your passengers as a result of an accident. You’re also covered if you’re driving someone else’s car (with their permission) or from injuries suffered if a car hits you. MedPay will pay no matter who caused the accident (which is why it’s called no fault in New York), although if someone else is at fault your insurer may subrogate against them, meaning it will seek damages from the other party. New York State law requires that every policy of insurance covering a vehicle principally garaged in the state have personal injury protection benefits which will pay you or members of your household $50,000 of medical expense, lost wages, and other economic loss coverage in the event any of you are in a motor vehicle collision.
Uninsured motorists (UM) coverage pays for your medical bills if an uninsured driver strikes your car or if you’re a victim of a hit-and-run. UM coverage is required by law in 20 states and the District of Columbia. The states are: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia and West Virginia.
Similarly, underinsured motorists (UIM) coverage kicks in when someone causes an accident but doesn’t have enough insurance to cover all medical bills. In that case, the at-fault person’s insurance pays out to its maximum and then your UIM coverage pays for the remaining bills, up to your own limit.
UM and UIM coverage also covers pain and suffering claims and, in some states, property damage.
These may seem like little luxuries, especially when you’re adding up your premium bill. But in the event of an accident these additional coverages can save you a bundle.
All companies writing automobile insurance will provide more than the minimum liability coverage required by state law. I urge you to speak with your insurance agent to determine the cost of additional liability coverage above the minimum $25,000 per person and $50,000 per accident required by New York State Law. I would suggest a minimum of $100,000/$300,000 and if you check, I believe you will find that the cost of this additional coverage is very reasonable.
Even more important, if you are able to afford increased liability coverage, you can have uninsured and underinsured coverage in an amount equal to the amount of liability insurance you carry. Uninsured and underinsured coverage is insurance which provides benefits to you and your family members in the event any of you are involved in a motor vehicle collision. This type of coverage is insurance for you and members of your household rather than insurance which will protect someone else in case of injury. The cost of obtaining the highest amount of uninsured and underinsured coverage available is usually very minimal for the additional benefit you and members of your family will receive from this type of coverage.
In the course of my office’s representation of people who have been injured in motor vehicle collisions, it has been apparent to us that often people have inadequate insurance coverage, or fail to understand the significance of certain types of coverage in their automobile insurance policies. My office has no interest in selling motor vehicle insurance policies. Nonetheless, as a courtesy to all of our clients, we would urge you to review your automobile policy to ensure that it has coverage that is sufficient to meet your needs in the event anyone in your family is injured in a collision.
If you do not desire to review your policy in the middle of your policy term, I would suggest that you put this letter with your insurance policy so that the next time you renew your policy you may review these matters with your agent. As a service for our clients, we are willing to review without charge your motor vehicle policies of insurance to recommend any changes in coverage. We would only ask that you call and make an appointment and bring in all policies covering all family vehicles together with the declaration sheets showing the coverage’s so that we can review the existing coverage with you.
Feel free to contact me directly or call 516-358-6900.