AN IMPORTANT MESSAGE FROM YOUR COBA-ENDORSED PERSONAL INJURY LAWYERS – QUELLER, FISHER, WASHOR, FUCHS & KOOL, LLP
By Christopher L. Sallay, Esq.
LAWSUIT PROTECTION FOR COBA MEMBERS
The importance of protecting yourself and your loved ones cannot be overstated. There are readily available protections a COBA member can obtain to provide greater financial protection for themselves and their family. It is not uncommon for COBA members to have base salaries in excess of $80,000. With the increase in income comes the increase in assets – homes, cars, financial accounts, etc. It is truly heartbreaking to see the fruits of years of hard work taken away because affordable and available legal protections were not utilized.
Although financial asset protection can come in many forms, the simplest and often most under-utilized relates to making sure a COBA member and his/her family are properly insured. A trivial amount of insurance payments each year can shield you, your family and your assets from the exposure to various types of lawsuits as well as provide peace of mind in the event of an accident.
MOTOR VEHICLE INSURANCE
Years ago, New York required a motor vehicle to have minimal insurance in the amount of $10,000. Because this level of insurance was woefully inadequate, the New York State Trial Lawyers lobbied the New York State Legislature to increase the minimum required insurance to $100,000. However, the Legislature decided to compromise and set the minimum limit at $25,000. As part of the compromise, the Legislature provided that consumers could purchase Uninsured/Supplemental Underinsured Motorist Coverage(UM/SUM) which would allow them to protect themselves and their loved ones at a very minimal cost.
Currently, in New York, the minimum amount of motor vehicle coverage you are legally required to maintain is $25,000. As the owner of a motor vehicle, it is your responsibility to make sure that your vehicle is adequately insured to protect yourself, your passengers as well as others driving your vehicle. Many vehicle owners try to cut corners and save money by maintaining the minimal level of insurance. Unfortunately, if they or someone driving their vehicle is fully or partially to blame for an auto accident, the vehicle owner is responsible for the value of all injuries in excess of the insurance limits.
For example, let us assume you maintain an automobile insurance policy with the minimal limit of $25,000 and you are involved in a motor vehicle accident for which your vehicle is fully or partly to blame. In this accident example, a person sustains an injury valued at $100,000. Your insurance would pay the full policy limits of $25,000 to the injured party, but you would still be personally responsible for the remaining $75,000. By cutting corners and maintaining a minimal policy, you are exposing yourself, your home, your bank accounts and all of your assets to a judgment in excess of your insurance policy. For this reason, it is essential that you take a long look at your insurance policy and speak with your agent realistically about your assets and the coverage needed to adequately protect yourself.
Having proper automobile insurance coverage is only one critical way to protect yourself and your family. There are other items of insurance that are both inexpensive and available to anyone purchasing a policy of insurance for an automobile. These additional coverages are invaluable to all COBA members as they serve to protect those assets for which you have worked so hard.
THE GREATEST PROTECTION FOR YOU, YOUR FAMILY MEMBERS AND FRIENDS WHO ARE PASSENGERS IN YOUR VEHICLE AND SUSTAIN SERIOUS PERSONAL INJURIES AS A RESULT OF THE NEGLIGENCE IN THE OPERATION OF A MOTOR VEHICLE IS TO HAVE MAXIMUM UM/SUM PROTECTION. INSIST ON YOUR BROKER PROVDIING UM/SUM PROTECTION AS THE COST FOR THIS INSURANCE IS MINIMAL.
UNINSURED/SUPPLEMENTAL UNDERINSURED MOTORIST COVERAGE
Among the easiest and most affordable ways to protect yourself and your loved ones is Uninsured/Supplemental Underinsured Motorist Coverage (UM/SUM) which is available for purchase as part of your automobile insurance package. Uninsured motorist coverage (UM) is mandatory in the state of New York and will automatically come as part of your automobile insurance coverage. However, Supplemental Underinsured Motorist coverage (SUM) is optional. You have to request this additional coverage when you buy your automobile insurance.
Uninsured Motorist Coverage (UM) will provide compensation for your injuries under a number of circumstances, including when there is no coverage on a vehicle causing the injury, or if the vehicle leaves the scene as in the case of a hit-and-run accident.
Supplemental Uninsured Motorist coverage (SUM) may be technically optional – if you do not want the coverage, you have to opt out. However, it is a strongly recommended purchase for every person driving a motor vehicle. It provides additional coverage in the event you or someone in your vehicle is injured in an accident where the other vehicle does not have enough insurance coverage.
The simplest way to explain the importance of SUM coverage is with a real-world example. If you are struck by a negligent motor vehicle and sustain serious injuries, you have the absolute right to bring a lawsuit against that negligent motorist/vehicle owner. Now suppose that negligent driver/vehicle owner maintains minimal insurance coverage of $25,000. Without SUM protection, that would likely be the extent of your recovery unless the negligent motorist had assets and you chose to legally pursue those assets. With SUM coverage, there is no need to pursue a claim against the negligent motorist for amounts above the policy of insurance. SUM coverage allows you to pursue a separate claim against your own insurance company for the limits of your SUM coverage to the extent they are above the coverage of the negligent motorist. This is why it is so critical to have adequate SUM coverage as it provides you the opportunity for a more complete recovery in the event of injury. In the instant example, you would be allowed a recovery in the maximum amount payable under your own SUM coverage policy limit reduced by the amount of money that was recovered from the negligent motorist. In other words if you carry $500,000 of SUM coverage and recover $25,000 from the policy of the motorist who struck you, you will then be able to pursue your own SUM policy for $475,000. Essentially, you are purchasing your own protection against being seriously injured and increasing the likelihood of full and adequate compensation for injuries.
UMBRELLA/EXCESS INSURANCE COVERAGE
Umbrella or Excess insurance is a type of personal liability insurance that covers claims in excess of regular homeowners or automobile policy coverage. Umbrella insurance covers not just the policyholder, but also other members of their family or household.
Many would suggest that umbrella insurance is necessary if the total value of your assets, including ordinary checking and savings accounts, retirement and college savings and investment accounts, and home equity is greater than the limits of your auto or homeowner’s liability. The idea behind this advice is that you want to have enough liability insurance to fully cover your assets so you are protected from losing them in a lawsuit. In reality, a jury award can easily exceed your policy limits, particularly if you engage in activities that increase your risk of being sued such as owning rental property, having a teenage driver in the family, owning a dog or owning a home with a swimming pool. The bottom line is – the more likely you are to be sued, the more strongly you should consider purchasing umbrella insurance.
Again, an example of how an Umbrella/Excess insurance policy works is the best illustration as to why it is something to consider. Let us assume that your homeowner’s insurance has a personal liability limit of $300,000. One of your children invites a friend over and he/she slips on ice on your front steps and sustains a serious leg fracture that requires surgery. The injured person brings a lawsuit and the jury determines that you failed to properly maintain the front steps and the injured person is entitled to $1,000,000 in compensation. This jury award is $700,000 higher than your homeowner’s insurance liability limit. Without an Umbrella/Excess policy of insurance, you would be responsible for payment of that $700,000 which could come from your savings, your retirement account or even require you to take out an additional mortgage. The financial hit to you and your family is devastating. However, if you have $1,000,000 in Umbrella/Excess insurance coverage, that umbrella policy will cover the portion of the award that was not covered by your homeowner’s policy.
The cost of an umbrella liability policy is relatively inexpensive because insurance companies will require you to have the maximum liability coverage available under your homeowner’s and auto policies before they will sell you an umbrella policy. Once you have the maximum limits for your auto and homeowner’s policies, Umbrella/Excess insurance policies become very affordable and provide protection to you and your loved ones that cannot be overstated. Even the most careful person with the best intentions can end up on the wrong side of a personal injury lawsuit. Protecting yourself and your family against the possibility of such a devastating financial loss is a must.
The attorneys and staff at Queller, Fisher, Washor, Fuchs & Kool and the Law Office of William A. Gallina, LLP are here for COBA members to consult with and advise as to the best way to insure that proper legal protections are in place for COBA members, family and friends.