We recently obtained an excellent recovery for a client seriously injured in an automobile accident.
The client’s prudent purchase of underinsurance coverage saved the day. It is a case study of being prepared in advance of the accident.
If you have had an automobile accident, please feel free to call me at 800-581-1434.
Harry sustained very serious injuries when he was struck by an automobile. He was crossing in the middle of a busy street. He was returning to his garage from an auto parts store.
The vehicle that struck Harry had $60,000 coverage. We were able to obtain the full limits. Ordinarily, that would be the end of the story, but Harry wisely purchased underinsurance coverage of $100,000.
Underinsurance is an optional coverage that you can buy which provides an extra measure of protection. It provides coverage above defendant’s insurance where you have sustained very serious injuries and where defendant’s insurance coverage falls below your underinsurance limits. This is a very necessary coverage in that New York’s minimum insurance is $25,000/50,000, and we have had many cases where a very seriously injured client can collect only $25,000.
In our case, Harry carried $100,000 in underinsurance. Defendant’s insurer paid its full limits of $60,000, however, that fell below Harry’s underinsurance. Harry’s own insurance carrier paid $100,000 in addition to the $60,000 collected. Therefore, Harry obtained a full recovery of $160,000.
One footnote should be noted. Harry had a Pennsylvania weekend home, and his policy was written in Pennsylvania. Under the Commonwealth’s law, Harry’s full underinsurance limit is added to his recovery from defendant, hence, Harry collected $60,000 plus $100,000. However, New York and New Jersey have a different rule. If Harry had taken-out the policy in Brooklyn, his primary residence, he would have collected only $40,000 from his underinsurance. Under New York’s rules, the amount that the client recovers against defendant is a credit against the underinsurance limit. Therefore, Harry’s underinsurance recovery would have been limited to $40,000, and his total recovery would have been $100,000 ($60,000 + $40,000) rather than the $160,000 that he collected ($60,000 + $100,000).
The lesson of this case: buy the most underinsurance that you can afford.
Our next post discusses another insurance twist in this case. See this post here.
If you have been involved in an automobile accident, please feel free to call me at 800-581-1434.
Mark E. Seitelman, 3/16/09, www.seitelman.com.