Warning: The dirty little secret that your auto insurance company doesn’t want you to know

I want to share a hard lesson learned by one of my clients, Brian, who sustained a career-ending knee injury when his car was hit by a truck. He asked me to share his story with the rest of the 9/11 community to ensure that others learn from his horrible experience with his own insurance company. He wants to make sure that each of you knows about a type of insurance that your own auto insurance company doesn’t want you to ask about: Supplementary Uninsured Motorist Insurance (SUM).

No matter how good a driver you are, you cannot control what other drivers do. You can’t rely on another driver to drive carefully, to refrain from texting, to pull over if he is tired, or to have sufficient liability insurance. The scary fact is that hundreds of thousands of automobile owners drive their cars with little or no liability insurance coverage. What you can control is how much SUM coverage you have on your own auto insurance policy.

Most drivers don’t realize that when you buy automobile insurance, you are buying both auto liability insurance (in case you negligently hit someone else), and you are buying SUM insurance (in case you’re hit by a car with little or no liability coverage). SUM is just as important as liability insurance. If you are in an accident with an uninsured driver, your own SUM insurance will be available to compensate you for your pain and suffering and lost income.  But, all too often, the insurance companies that advertise that they have the most affordable rates (“15 minutes will save you 15%….” , “you’re in good hands with …….”, “name your price.…”, “ ……is on your side”) don’t tell you that your SUM coverage will be considerably lower than your liability coverage unless you specifically request higher coverage. Most people do not know this until it’s too late— after they are seriously injured by an uninsured driver.

Injured twice: First by a negligent driver and then by your own insurance company

It was heart breaking when Brian found out that his injured knee, despite multiple surgeries, had not healed well enough for the FDNY doctors to let him return to work. He was forced to retire. Brian was unlucky for several reasons.

• First, at age 42, he sustained a permanent painful and disabling knee injury.
• Second, he and his family lost the steady and secure income from a well-paying career.
• Third, since he had less than 20 years on the job and he was injured off-duty, his pension had not vested. Instead of a healthy monthly pension, he receives just a small payment.
• Fourth, the car that struck him had no liability insurance coverage.  Like most of my firm’s clients, Brian didn’t know anything about SUM coverage, let alone how much coverage he had.
• Brian’s own insurance carrier misled him. The sad reality is that while Brian had purchased $500,000 of liability insurance, he didn’t realize that his insurance company had sold him just $50,000 of SUM coverage (see his policy’s insurance coverage limits, below).  Because the uninsured driver had no assets, this is all we were able to get for Brian.

That isn’t justice!

Most insurance companies are only too happy to sell you expensive liability insurance.  Because SUM premiums are so inexpensive, insurance companies have no incentive to sell you an equal amount of liability and SUM coverage. Unfortunately, we see this sad story all too often.

In summary: Please call your auto insurance company today and demand that your SUM coverage equal the amount of liability coverage.

• As a rule, you should have enough liability coverage to compensate a seriously injured person in case you are sued so that he or she will not be tempted to chase after your personal assets (the value of your home is the minimum amount of liability and SUM insurance coverage that you should have).
• Make sure that you have enough SUM coverage to compensate you for your pain and suffering and future lost income in case you suffer disabling injuries in an accident with an uninsured driver.

If you have any questions about automobile insurance coverage, please feel free to call my office for a free consultation.

Mike Barasch