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Welcome back to the third Part of this crash course on motor vehicle accident cases. The second segment looked at the two components of a personal injury case: liability and damages. This segment will explore how the work done in the investigation stage shapes the decision on whether to settle your car accident case or to file a lawsuit. One crucial factor in this decision is a topic that has not been addressed, insurance coverage.

It is important to understand the several types of insurance coverage that may be available to compensate you for your injuries. Most people know that compensation for the damage to your vehicle and your injuries should come from the vehicle which caused the accident. The insurance on the vehicle that hit you is the primary coverage source used to compensate you for your injuries. In New York, the minimum required insurance coverage is $25,000.00. If you have a severe injury which has kept you out of work and has required extensive medical treatment and rehabilitation, the $25,000.00 minimum policy will not be sufficient to compensate you for your pain and suffering and any lost wages.

When the primary coverage is insufficient, it is important to identify additional sources of coverage. It will be important to determine whether the owner and the driver of the vehicle are covered by the same or different insurance policies. If the driver and the owner have different policies, both policies may be available to compensate you. You should investigate whether the driver or the owner have an excess or umbrella policy which might provide additional coverage for a car accident. You should also look at your own insurance coverage. Your car insurance policy provides supplemental underinsured motorist coverage which may become available to you under certain circumstances.

This supplemental underinsured motorist coverage provides additional coverage when the primary insurance coverage is insufficient to adequately compensate you for your injuries.

Consider the following example:

Tony is driving Jessica’s car and rear-ends Peter while Peter is stopped at a traffic light. Peter sustained a “serious injury” with an estimated value of $200,000.00. Jessica has the minimum insurance coverage, $25,000.00. Tony has a different policy providing $50,000.00 of coverage. Peter’s policy provides $300,000.00 of supplemental underinsured motorist coverage. In this case, Peter would be entitled to the $25,000.00 from Jessica’s policy and the $50,000.00 from Tony’s policy. However, $75,000.00 is insufficient to adequately compensate Peter for his $200,000.00 injury. In this case, Peter would file a claim with his carrier for supplemental underinsured motorist coverage. Peter has already received $75,000.00 from the at-fault individuals and would be entitled to seek an additional $125,000.00 from his own carrier.  

The purpose of the supplemental underinsured motorist coverage is to make you whole by paying the difference between the value of the injuries, $200,000.00, and the $75,000.00 received as compensation from the parties responsible. But there is an important caveat to the interplay between primary coverage and underinsured coverage. You must exhaust the full amount of all primary insurance coverage before you become eligible to receive supplemental benefits. If Peter obtained any amount less that the full $75,000.00 available from Tony’s and Jessica’s policies, Peter would not be eligible to apply for the supplemental benefits even though Peter’s injuries are valued at $200,000.00 and his policy provides more than enough coverage to compensate him.  

Now that you understand the several types of coverage, you can see how the available coverage may influence your decision to settle your case or proceed with a lawsuit. In the example, liability was clear. Tony and Jessica were clearly at fault for causing the rear-end accident. Peter suffered a “series injury” with an estimated value of $200,000.00. In that case, if Peter was offered anything less than the $75,000.00 of primary coverage, the choice is simple. Peter would pursue a lawsuit to collect the full amount of primary coverage and protect his ability to file a claim for supplemental underinsured motorist benefits.  

The decision on whether to settle or sue becomes more complicated if the facts are tweaked a little bit. Let us say that Peter and Tony are equally responsible for causing the accident and Peter’s injuries have an estimated value of $150,000.00. Tony and Jessica are entitled to reduce their obligation to compensate Peter by the percentage of fault attributable to him. An even 50-50 split of a $150,000.00 injury is still $75,000.00. But what would Peter do now if he was offered $70,000.00 or $65,000.00? This is where the guidance and advice of an experienced personal injury lawyer is most valuable. A knowledgeable trial lawyer will help you to understand the cost-benefit analysis of settling for these lesser amounts instead of filing a lawsuit. A seasoned attorney can help you with a realistic appraisal of the time and money it would cost to pursue a lawsuit. When the cost of a lawsuit is greater than the difference between the value of your injuries and the settlement offer, it may be in your best interest to settle the case and avoid the time and expense of litigation. 

If you have any questions or would like more information about this topic, email me or join me on April 26, 2023 for my webinar.   Please join us next week for the fourth Part of this crash course on motor vehicle accident cases which will explore what happens when a lawsuit becomes necessary to obtain the compensation you deserve.

This is not intended to be legal advise.  You should contact your attorney to discuss your specific situation.


Andrew Boughrum, Esq., is an Associate at the firm and practicing general litigation and personal injury.
He can be reached at 845-764-9656 and by email.












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