Types of Car Insurance

Types-Of-Car-Insurance

As a New York driver, it is important to know what types of car insurance are available.   There are several categories of automobile insurance. These include: personal injury protection (PIP) and bodily injury liability (BI). It also includes property damage liability (PD), and uninsured/underinsured motorists coverage (UM/UIM).

When looking at types of car insurance, you should start with Personal injury protection, or PIP. It is no-fault coverage. This means your insurance company will pay PIP benefits (including medical bills and lost wages). This is for you and any passengers injured by your car even if you were not at fault.  Only under very limited circumstances will PIP benefits be denied.
PIP benefits generally cover expenses up to $50,000. You can purchase Additional PIP coverage which will raise your limits to $100,000 or more. Nowadays, with rising cost of medical care a$50,000 policy may be exhausted very quickly. You may end up with large medical bills, for which you will have to pay out of your own pocket if you have a lower rate.

What Type of Car Insurance Can I Recovery From in an Accident?

The second type of car insurance you should focus on is bodily injury liability, or BI. If you injure another party, it covers their injuries.  BI coverage also covers attorneys’ fees if a lawsuit arises out of the accident.  The minimum BI coverage is $25,000/$50,000. This means it will pay no more than $25,000 for one person’s injuries. It will pay more than $50,000 for all injuries in the accident.  Property damage liability, or PD, covers damage caused to another person’s vehicle, bicycle, or other object by your vehicle. The minimum limit is $10,000.  As we will discuss below, higher policy limits are available. It is often wise to purchase higher limits. This ensures that you are fully covered in an accident.

What If The Car Which Hits Me Doesn’t Have Any Type of Car Insurance?

Unisured/Underinsured motorists coverage, or UM/UIM, is a type of car insurance which protects you if you are involved in an accident with someone who is uninsured.  UIM also protects you if you are hit by someone who has insurance, but not enough insurance to cover the damage you suffered. It also protects you if you are involved in a hit and run. This holds true if we are never able to obtain their identity.  

The minimum UM/UIM coverage is $25,000/$50,000.  As with BI insurance, this will pay no more than $25,000 for one person’s injuries. It will pay no more than $50,000 for all injuries in the accident.  You can purchase supplemental UM/UIM coverage. You are not allowed to have UM/UIM limits that are higher than your BI limits.  It is important that your UM/UIM limits are the same as your BI policy limits. This is so you are fully protected in case you are involved in an accident and sustain injuries.

How Do I Get Extra Protections?

The limits listed above are the minimum requirements in New York. You should purchase higher limits for all types of car insurance if possible.  If you injure someone and you are at fault, the minimum coverage many not be enough to cover the injured parties medical expenses.  Injured parties can come after your personal assets in a lawsuit.  The more personal assets you have the higher your insurance limits should be.  For most people, it is appropriate to get BI and UM/UIM insurance with $100,000/$300,000 limits or higher.  Again, that means your insurance will pay up to $100,000 for one person’s injuries and up to $300,000 for all injuries in the accident (in the case that more than one person is injured).

What is an Umbrella Policy?

In addition, if you have a lot of assets you want to protect, you can purchase umbrella/excess insurance.  An umbrella policy is an extra type of car insurance that can protect you and your assets in cases of substantial loss claimed against you.  Generally, umbrella insurance provides additional lawsuit coverage of $1,000,000 or more.  Umbrella insurance will pay litigation costs (including attorneys’ fees) as well as judgments arising from said litigation if the costs exceed your primary insurance policy limits.  For example, if you have a $100,000/$300,000 BI policy and a $1,000,000 umbrella policy, your insurance will pay up to $1,100,000 for one person’s injuries and up to $1,300,000 for all injuries in the accident (in the case that more than one person is injured).

If an umbrella policy has a UM/UIM benefit, it provided additional coverage to the injured party and the vehicle owner.  Very few companies provide umbrella policies with UM/UIM benefits. 

How Can I Get Help?

You should take a realistic look at your assets before determining how much and which types of car insurance you should purchase.  The bottom line is accidents happen.  When they do, you want to make sure you are covered.  Accidents cause a lot of stress, so put your mind at ease and make sure you have the insurance coverage you need.

If you have any further questions regarding insurance coverage or have already been involved in an accident, please contact our office at 212-514-5100 to set up a free consultation

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