Driving takes effort and everyone has to follow safety rules whenever they get behind the wheel. These include following speed limits, wearing a seatbelt, obeying all warning signs and using your headlights and wipers when required. However, it also means carrying the appropriate documentation to drive, including auto insurance. If you are driving a vehicle on behalf of a business, then you probably will need to buy commercial auto insurance to meet these requirements.
Unfortunately, just because you follow the law, that doesn’t mean that someone else will. Therefore, your commercial auto insurance can provide a benefit that will protect you against other drivers who don’t have appropriate auto insurance. These perks are called uninsured and underinsured motorist coverage.
Though optional in most states, you should always add this benefit to your company’s commercial auto insurance. It’s there to help you when you can’t claim damage costs from someone else’s insurance policy, even though you might have a right to do so.
Commercial Auto Insurance Requirements in New York
Commercial auto insurance is a benefit provided for businesses who own or use automobiles in their lines of work. It can extend liability insurance and physical damage coverage to the drivers and vehicles associated with your business. It will help you pick up the pieces of car accidents and other hazards.
Most states require all drivers (commercial drivers included) to carry auto insurance. Depending on the type of commercial vehicle you own and the services you provide, your policy requirements might vary.
In New York, which is a no-fault insurance state, the most common requirements for most drivers include minimum amounts of:
- No-fault medical coverage (also called personal injury protection or PIP coverage)
- Liability insurance
- Uninsured motorist protection
If you have a car wreck, and the accident is someone else’s fault, then you will first file against your PIP coverage for your injury costs. Only once you max out this coverage will you be able to file against the other driver’s liability coverage for your remaining property damage and injury costs.
However, there is no guarantee that another driver will have the liability insurance to compensate you if you reach the threshold to file against their liability coverage. Should this situation arise, the mandatory uninsured motorist coverage on your own policy can extend further benefits to you.
New York Uninsured Motorist Coverage
If your commercial vehicle is involved in a wreck, then you, your employee drivers or passengers riding with you might have a right to file against the other driver’s liability insurance if the accident was their fault.
However, even though all drivers in New York are supposed to carry liability insurance, there is no guarantee that they will do so. In a situation such as this one, the benefit of uninsured motorist coverage can come in handy. The policy can also assist you following hit-and-run accidents, where another person hits your vehicle and then flees the scene before you can collect their information.
If you run into a situation where you cannot file a claim against the at-fault driver’s liability coverage, you can then file against your own uninsured motorist coverage. The policy will then compensate you for your bodily injury costs remaining after you file a claim on your PIP coverage.
Uninsured motorist coverage is subject to several regulation under New York law:
- All policies must include a minimum amount of uninsured motorist coverage equal to the policy’s bodily injury liability limits coverage. So, if you have a $100,000 per person/$300,000 per accident bodily injury liability policy, then you will also receive $100,000/$300,000 uninsured motorist benefits.
- The coverage will only pay for bodily injury costs. It will not pay for third-party property damage.
- Most of the time, your uninsured motorist benefits will not cover you for accidents that occur outside of New York state. However, you can ask you agent if they offer a policy endorsement to provide the extended benefit.
New York Underinsured Motorist Coverage
Alongside uninsured motorist coverage, there is an additional benefit offered by most New York commercial auto insurers called underinsured motorist coverage. Often, you can buy both types of coverage under Supplementary Uninsured/Underinsured Motorist (SUM) benefits.
Underinsured motorist benefits work a bit differently from uninsured motorist coverage. It will help you pay for qualifying losses when a third party has liability insurance, but their policy limits will not cover the full extent of your losses.
Always ask your agent how underinsured motorist coverage will pay your benefits. You will usually receive benefits from your PIP coverage first, followed by the other driver’s liability coverage and then your own underinsured motorist coverage. However, by filing against that driver’s liability coverage, you will limit the amount of money you can receive from your underinsured motorist benefit.
In many cases, your underinsured motorist coverage pays only the value of your own SUM policy limit that is in excess of the other driver’s liability coverage. So, if you have $100,000 of uninsured motorist coverage and the other driver has $25,000 of bodily injury liability coverage, then you will only receive an underinsured motorist benefit worth $75,000. The $25,000 offered by the other driver’s liability coverage will be subtracted from the $100,000 of your own policy.