Uninsured and Underinsured Motorist Coverage
Uninsured motorist (UM) coverage pays for injuries sustained by you and your passengers caused by an uninsured motorist. Underinsured motorist (UIM) coverage pays when you or your passengers are injured as a result of negligence by someone with insufficient liability insurance to cover your losses.
In 2012, 12.6% of motorists nationally, or about one in eight drivers, was uninsured, according to a 2014 study by the Insurance Research Council (IRC). The percentage has been declining in recent years, down from 16% in 1993, due to stricter enforcement of mandatory insurance requirements by many states like New York.
In New York, the statistics are much better: only 5.3% uninsured motorists, making NY 3rd best in the USA. Our neighboring states (NJ- 10.3%; CT- 8%; PA-6.5%; and RI 17%) have significantly higher rates, and in most cases lower minimum coverage limits as well. (Source: iii.org).
So, even in a state like New York, where there is only a 5% chance you’ll have an accident with another vehicle whose driver is not insured, why would you take the risk? Plus, the drivers from the bordering states around New York increase your risks dramatically because these drivers frequent New York regularly for travel or work. For example, if you live in New York, but get into an accident with a person from Connecticut or New Jersey, you now go from having a 1 in 20 chance for this person to be uninsured to a 1 in 10 chance.
All New York auto policies provide mandatory uninsured motorist (UM) coverage (25/50/10) and optional supplemental uninsured/ underinsured motorist (SUM/UIM) endorsements that increase these limits. This type of coverage protects you and your family if you are in an accident with either an uninsured or underinsured vehicle. This coverage also protects pedestrians that are hit by a vehicle that flees the scene. Any relative who lives in the household of the insured, or anyone named on the policy, has this coverage.
The Underinsured Motorist portion of the SUM/UIM endorsement covers the policyholder and family by protecting them if involved in a collision with another vehicle that has limited coverage. Again, looking at our neighboring states, they all have lower statutory limits than New York: NJ 15/30/5; CT 20/40/10; PA 15/30/10. In New York State, you can purchase SUM/UIM benefits equal to but not greater than your liability insurance.
In New York State, you are required to carry at least statutory uninsured motorist with limits of $25,000 per person and $50,000 per accident for those accidents that occur WITHIN New York State. If you travel out of state for business or vacations, you should definitely consider the optional SUM/UIM coverage. This provides the same limits as statutory uninsured motorist, but it extends coverage to accidents that occur OUTSIDE of New York State.
So, depending on what your financial and budgetary constraints are, you should seriously look into finding out what adequate coverage for underinsured and uninsured motorist insurance is for your area. While none of us think about ever getting into an accident, there were 5.5 million car accidents in 2009 alone. And if you do the math that would mean nearly 770,000 of those accidents were involved with an uninsured driver.