When shopping for a motor vehicle insurance policy, we usually have one thing in mind: price. Insuring a motor vehicle, specially in New York City, can be very expensive. Therefore, price usually becomes the one and only one number that we look at, without giving much importance to the policy limits included in the policy. However, understanding your insurance policy is crucial, as a couple bucks can make a difference between being adequately covered, and not.
Below are the main numbers to understand in an insurance policy:
- Bodily Injury (BI): This is the amount the insurance company will pay for physical injuries sustained by other people as a result of the insured’s liability. The minimum BI coverage in New York State is $25,000. The downside of having such limited policy is that in the event that a lawsuit is commenced against the insured, the case goes to trial and the resulting verdict exceeds $25,000, the insured will be personally liable for the exceeding amount. For example: John, who has $25,000 in BI insurance, rear ends a vehicle driven by Stephanie. As a result of the accident, Stephanie sustains a fracture. Thereafter, Stephanie sues John. The jury verdict is for $100,000. John’s insurance company will pay $25,000 and John will be personally liable for $75,000.
- No-Fault (NF): New York State is a “No-Fault” State, which means that whenever there is an accident, the auto insurance company will pay up to $50,000 in medical benefits, regardless of whose fault the accident was (hence the name “No-Fault”). Although individuals can negotiate for higher benefits, the great majority of policies in New York carry the $50,000 minimum.
- Property Damage (PD): Generally, this is the amount that the insurance company will pay for the property damage caused to other vehicles as a result of the insured’s fault.
- Uninsured Motorist (UM): This category is usually overlooked, but can be vital. This category comes into play when a person is involved in an accident, and the accident is caused by an unidentified individual, or an individual who has no insurance policy. This is very common in hit and run accidents and in accidents with stolen vehicles. The minimum UM policy in New York State is $25,000.
If you were involved in a motor vehicle accident, call our office immediately and speak to a NYC based accident lawyer, as delays can hinder your rights! 718-852-4700.