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Are you adequately insured by your car insurance policy? What does your car insurance cover?

Car insurance is a requirement in New York; if you own or drive a vehicle, that vehicle must be insured. (Sidebar: operating a vehicle that does not have insurance coverage can land you a ticket with a penalty of 15 days in jail, revocation of your driver’s license for one-year and a $1,500 fine. Additionally, you could be on the hook for DMV fees.) Frequently, when buyers are shopping for car insurance, they are usually most concerned with their rates and their deductible. (A deductible is the sum of money you are required to pay out of your pocket per accident before the insurance company’s coverage obligation begins.) But what are you really paying for? Nobody expects to be in a car accident, and therefore it’s easy to dismiss the need for added coverage. Is added coverage worth it?

Here are some types of coverage to help you decide what types and amounts of protection you and your family might need:

Liability Coverage: This type of coverage is mandatory in New York State. It protects you and anyone driving your vehicle with your permission. Liability insurance consists of bodily injury coverage and property damage coverage.

Bodily Injury Coverage: The dollar amount is what the insurance company will pay out to another person for injuries caused as a result of your negligence. As outlined below, the minimum coverage requirement in New York is $25,000 for one person, $50,000 per accident. When shopping for car insurance, you may be less concerned with what other people can collect from you. However, in the event of an accident where you accidentally severely injure another person, you could be required to pay out of pocket for the damages that exceed the minimum coverage ($25,000).

Property Damage Coverage: The minimum in New York State is $10,000 worth of coverage for property damage you cause.

No-Fault Benefits: Basic No-Fault coverage is $50,000 per person. It covers medical/health expenses, lost earnings, and certain other reasonable and necessary expenses related to injuries. It covers you as the driver, any passengers, persons in other vehicles and pedestrians. No-Fault coverage is available to everyone who sustained an injury as a result of the accident, regardless of fault (hence the name “No-Fault”).

Uninsured Motorist Coverage: This type of coverage has a minimum amount as bodily injury $25,000 and covers you, members of your household, passengers in your car, and your spouse when the person who is liable doesn’t have car insurance or you’re involved in a hit and run. This does not extend to property damage unless you specifically add that feature on to your insurance policy.

Underinsured Motorist Coverage: underinsured is not a requirement and only covers claims where an at-fault party does not have enough coverage to take care of your damages for bodily injury. Unless purchased, this type of coverage does not come with your standard policy. Similar to uninsured motorist coverage, this will likely cover you, members of your household, and our spouse. Again, this policy, unless specifically purchased, does not include property damage.

Collision Coverage: unlike property damage coverage, this type will cover damages to your car. This insurance coverage is usually not required and will not be a part of a standard minimum policy. However, if you carry a loan on a car, the lienholder may require you to have this type of insurance.

Comprehensive Coverage: this covers you with respect to damages to your car from theft, fire, vandalism, and natural disasters. It is not mandatory. Usually, your policy will cover you up to the current market value of your car. Similar to collision coverage, this too is not mandatory and will not be available on minimum coverage insurance policies.

Supplemental Spousal Liability Insurance: Most minimum coverage insurance policies do not cover a spouse’s injuries in the event you injure your spouse while driving. In NY, married couples are permitted to purchase supplemental spousal liability insurance.

Gap Insurance: this is completely optional, and will not accompany your standard policy. This type of insurance may be helpful when you have a loan on your vehicle. In the event, you’re in an accident, and the value of the car is less than the outstanding loan, the gap insurance will cover the difference between the value of the care and the loan amount. The lienholder has to be a bank or institution (not an individual person). At times, this type of insurance may be available through the dealership or warranty companies. It can usually be purchased through your car insurance carrier as well.

Certain insurance companies offer other additional features you can purchase. Usually, coverage over the minimum policy requirements is inexpensive. Your car insurance may even allow you to purchase towing and labor coverage, mechanical breakdown coverage, roadside assistance, and medical and funeral services expenses.

You can speak with your broker or insurance carrier to discuss the different options and outcomes with him/her. You don’t want to learn what you’re covered for after an accident and you don’t want to be underinsured. If you’ve been in an accident that was not your fault, contact the Law Offices of Jennifer G. Tocci, P.C., for a free case evaluation.

Attorney Advertising. This blog post is designed for general information only. The information presented at this site should not be construed to be neither formal legal advice nor the formation of a lawyer-client relationship. Prior results do not guarantee a similar outcome. New York State only.

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