When is the last time you took a good look at your auto insurance policy? Are you aware that you might be at risk of devastating medical expenses if you are seriously injured by a driver with little or no insurance?
Recently, the New York State legislature sought to remedy this problem by passing the supplementary uninsured/underinsured motorist (SUM) bill. The legislation is currently under review by Governor Andrew Cuomo’s office. The bill is supported by many legal organizations. The insurance industry vigorously opposes it.
Uninsured Motorist Claims
In 1939, New York became one of the first states to enact coverage that shields New York motorists against uninsured or underinsured drivers. The purpose was to protect New York residents against car accidents caused by uninsured vehicles registered within or outside of New York State as well as vehicles that are stolen, unregistered, or that have left the scene of the accident.
Under the existing law, insurance companies charge every New York driver for uninsured motorist coverage in the amount of $25,000/$50,000. Insurers have no obligation to offer any coverage over the mandatory minimum. It is up to the individual driver to request a higher level of protection, and many are unaware that they have the option of improved coverage.
About The New Legislation
Under the new legislation, drivers will automatically be charged for SUM coverage in the same amount as the policy’s liability coverage. For example, if you are carrying a $100,000 liability policy, your SUM coverage will automatically match it. If you want your SUM coverage to be lower than your liability, you must specifically choose to decline the higher rate of protection.
Supporters of the legislation argue that it preserves consumer choice, protects motorists and saves taxpayer money that might otherwise be spent on Medicaid or other public benefits when accident victims are hurt by uninsured and underinsured drivers. Opponents of the bill, most notably in the insurance industry, say that it interferes with consumer choice, forcing motorists to opt out of unwanted coverage rather than opting into a higher level of protection if they want it. Insurers predict that companies will be obligated to raise insurance rates because of the additional liability and that consumers will end up paying a lot more for their auto policies.
There are convincing arguments on both sides of the issue. But consider this statistic: as many as 8 percent of New York State drivers are uninsured. This poses a serious risk to all insured motorists, especially in light of the assumption that a driver who is uninsured is far less likely to respect the safety of other people on the road.