New York State requires all owners of motor vehicles to carry bodily injury insurance. However, in NY, the minimum amount the law requires is only $25,000. In most cases we handle, $25,000 is not sufficient to compensate the injured party for his/her injuries.
The injured party's only recourse is to obtain a judgment against the defendant and attempt to enforce that judgment. Unfortunately, that course of action is usually not beneficial to any of the parties involved--plaintiff or defendant--and it can take years to obtain a judgment that is, ultimately, uncollectible. Usually, individuals with assets don't have the state minimum $25,000 insurance coverage.
However, there is a provision of your insurance policy that allows New York State residents to protect themselves from this unfortunate situation. Any owner of a vehicle can insure themselves with Supplemental Underinsured Coverage (SUM/UM, usually referred to as SUM).
SUM protects individuals from a situation where the defendant does not have sufficient coverage to compensate the injured party. Once the defendant offers their entire policy, then the injured party's own insurance policy provides supplemental insurance.
For instance, if a defendant injures a plaintiff, and the injuries are worth $300,000, but the defendant only has a $25,000 policy, then the injured party would only receive $25,000. However, if the injured party has SUM coverage on their own policy in the amount of $500,000, then they would be able to collect the $25,000 from the defendant, plus an additional $275,000 from their own policy.
This is why it is so important to make sure you call your car insurance company and ask them about your SUM/UM limits. You should make sure that you and the members of your household are protected in the event of a serious accident.The entire Raphaelson & Levine team, along with the New York State Trial Lawyers Association, were recently lobbying in Albany to make sure insurance companies inform their customers of the available SUM/UM coverages.