Understanding Your Auto Insurance Policy

Both New York and New Jersey, have adopted the No Fault insurance law. In basic terms, the no fault insurance law provides that when you are involved in an automobile accident your own insurance company will pay your medical bills and lost wages regardless of who was at fault for causing the accident. This means that even if you drive your own car into a telephone pole through no fault of anyone else, your medical bills and lost wages will be paid. Your own insurance company will also pay your medical bills and lost wages if you are standing still at a red light and are struck from behind by another car. Each state has its own rules about which insurance company pays for passengers in a vehicle and pedestrians struck by other vehicles.

While the no fault insurance law does provide benefits for medical bills and lost wages, it generally severely limits an injured person’s right to recover for pain and suffering. For example, under New York’s no fault law, an individual injured in an automobile accident can only make a claim against a negligent party for pain and suffering if that individual sustained a “serious injury”. Serious injury is specifically defined under New York’s insurance law as: death; dismemberment; significant disfigurement; fracture or broken bone; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of body function or system; or, a medically determined injury or impairment which prevents a person from performing substantially all of the material acts which constitute that person’s usual and customary daily activities for not less than 90 of the 180 days immediately following the accident. An individual injured in an automobile accident must be able to show that he or she has suffered an injury which falls into one of those 9 categories to recover for pain and suffering.

New York law requires that car owners insure their vehicles. Unfortunately, very few people realize that the “standard” automobile insurance policy actually contains many different parts, each of which must be examined carefully to make sure it fits your needs. It is most important to review your Liability Coverage, your UninsuredUnderinsured Motorist coverage, and your Personal Injury Protection coverage. Repairs to your vehicle are and.

Liability coverage protects you if you injure someone else in an accident. When an injured party makes a claim against you, your insurance company is obligated to defend and indemnify you up to the amount of liability coverage you have. We suggest an absolute minimum of $300,000 in primary liability coverage, and an umbrella policy of $1,000,000. This type of coverage adequately protects most individuals, but businesses and individuals with substantial net worth should carry additional umbrella insurance.

Uninsured (UM) and Underinsured (UIM or SUM in some policies) coverage provides you with additional protection if you are injured in an automobile accident and the responsible party does not have sufficient insurance coverage to compensate you for your injuries. New York’s minimum liability insurance requirement is $25,000. The only people who purchase such low insurance policies are those that have nothing to lose – no assets and low income. No matter how much liability insurance you have, if you are hurt by someone with minimal coverage, unless you have purchased adequate UM and SUM coverage, you will not be able to recover adequate compensation. Your UMUIM coverage should at least match your Liability coverage.

Personal Injury Protection (or PIP) coverage sets the limits for your “no- fault” benefits. We recommend purchasing the maximum available. This coverage provides your medical and lost wage benefits regardless of who caused the accident. The minimum amounts are rarely sufficient in the case of a serious injury.

Collision Insurance “Collision” coverage pays for repairing or replacing your damaged vehicle regardless of who caused the accident. You receive the cost of repair or the actual cash value of the vehicle whichever is less, minus your deductible. The higher your deductible, the lower your premium. If you were not at fault and if your insurance company recovers from the other driver’s insurance company you should receive a refund of your deductible. Collision coverage is usually mandatory on leased vehicles and for those vehicles for which banks have loaned money.

The personal injury lawyers at Kantrowitz, Goldhamer & Graifman, PC have been representing accident victims with serious injuries for decades.

Call us toll free at ?800-660-7843 or fill out the form on our website at www.kgglaw.com  to schedule a free personal injury consultation. We will review your case thoroughly. The consultation is free and there is no obligation.

By Barry Kantrowitz, Esq, Senior Partner, Kantrowitz, Goldhamer & Graifman, P.C.