Just read an article in the New York Times titled, “How to Know if You Have Enough Auto Insurance“. The article gave some interesting statistics: Nationally, the average jury award for motor vehicle accident injuries is $181,197, and about 5 percent of car accident injury claims in 2010 were for more than $100,000 while only about 2 percent reached $300,000.
Then there are those occasional multi-million dollar jury verdicts. How do you protect yourself against those?
Anyone can make a mistake driving, including you. Do you need to protect yourself against such judgments? Is it expensive to do?
It costs only about $200 extra annually to bring your liability insurance from $50,000 to $1 million. Increasing your “SUM” coverage (explained below) to that $1 million costs only about ½ of that.
Buying liability insurance protects you from these judgments. If you screw up and hit someone, your insurance will stand by you, defend you in court, and pay any settlement or judgment for you, but only up to your policy limit. So if you have only $25,000 in coverage and a jury awards your victim $100,000 that leaves you high and dry to the tune of $75,000. That’s why you want to buy enough insurance to at least cover your asset exposure. The more assets you have, the more liability insurance you want to protect them. If you have nothing, then getting minimal insurance makes sense, because you can simply file for bankruptcy if you get slammed with a verdict beyond your insurance coverage and assets. If you have something you don’t want to risk losing, you’d better get an appropriate level of liability coverage.
Supplemental underinsured mostorist insurance (SUM) is different. This protects you not from your own mistakes, not from judgments by others against you, but from others’ mistakes, from injuries you suffer at the hands of the other guy. If the other guy who creams you has no or little insurance, your own SUM insurance will “stand in the shoes” of the other guy, and pay up to your own policy limits. The odds of getting hit by someone with no insurance coverage are not that negligible, about 15% , and there are lots of drivers out there mowing people down with only minimal ($25,000 in New York) coverage. In fact, about 20% of motorists carry only the legal minimum liability insurance. If the negligent driver who hurt you or your family members carried only $25,000 in coverage, but you have $500,000 in SUM coverage, then you and your family members will be covered to the tune of the full $500,000. And if you are badly hurt, boy will you need it!
Worth the extra cost? Don’t wait to get in an accident to find out . . .
Email me at: firstname.lastname@example.org I’d love to hear from you!
Michael G. Bersani, Esq.
Central NY Personal Injury Lawyer
Michaels Bersani Kalabanka