After much consideration about what information I would like to share with the Korean community as a personal injury attorney, I decided to write a column on auto insurance. Everyone understands that the beginning and end of compensation for damages resulting from an accident depend on the details of the auto insurance policy. However, many individuals face difficulties after an accident due to a lack of precise understanding of specific clauses, which leads to the inability to select the necessary provisions appropriately.

This table serves as a guide for what to choose and what to avoid when setting up an auto insurance policy. In previous columns, I explained in detail the significance of Standard Policy, PIP Coverage, and PIP Primary (not Health Care primary), as well as their respective legal implications. Lastly, I want to emphasize the importance of the Uninsured Motorist / Underinsured Motorist Coverage.

UNINSURED MOTORIST / UNDERINSURED MOTORIST COVERAGE (“UM/UIM”)

UM/UIM provides benefits when the other party either has no auto insurance or has insurance but their liability coverage limits are insufficient to cover your medical expenses or vehicle repair costs. For example, let’s consider a scenario where Person A has a Standard Policy with $250,000 UM/UIM coverage. While waiting at a red light, Person A is struck from behind by another vehicle that did not see the signal. The police arrive, and Person A is taken to the emergency room due to severe injuries. The other driver, Person B, has a Basic Policy with NO Liability Coverage (which compensates for injuries caused by your fault). In this case, even though Person B is 100% at fault, there is no liability coverage to compensate for the injuries and property damage, leaving Person A without any compensation through Person B's insurance. However, legally, Person B is considered an Uninsured Motorist, allowing Person A to claim benefits up to $250,000 through their UM/UIM coverage. If Person B has no insurance at all or if their insurance is invalid for any reason at the time of the accident, they are also legally considered an Uninsured Motorist.

Underinsured Motorist coverage applies in similar situations. If we assume that Person B has $15,000 in Liability Coverage, Person A can receive compensation up to $15,000 through Person B's insurance. However, if Person A’s medical and repair costs exceed $15,000, they can claim the remaining expenses within their UIM limits. Of course, if Person A does not have UM/UIM coverage, they can sue the uninsured driver personally. However, if Person B does not have sufficient assets, the likelihood of Person A receiving compensation is low. The easiest and most reliable way for Person A to cover hospital and repair costs after an accident with an uninsured driver is through their UM/UIM coverage.

Many people do not fully recognize the importance of the UM/UIM clause and either set low limits or do not set them at all. Despite auto insurance being mandatory, there are many drivers without insurance or with no liability coverage, as in the example above. It is essential to establish UM/UIM limits in preparation for accidents caused by such drivers. Please refer to the auto insurance guide mentioned earlier and check the details of your current auto insurance policy. It is crucial to set insurance provisions that ensure the safety of you and your family.

Written by Attorney Eunmi Hwang

Personal Injury Attorney in New York and New Jersey

Associate Attorney

Maggiano DiGirolamo & Lizzi

201 Columbia Avenue Fort Lee, New Jersey 07024

☎ 201-585-9111

ehwang@mdltriallawyers.com