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SUM Things to Know About Insurance
November 28, 2008

In these turbulent economic times, many of us are concerned about protecting our assets, whether it is the home, savings for a child’s education, or a dwindling retirement account.  We need no reminder that life holds few guarantees and to further protect ourselves we have insurance on our lives, our homes, our cars, and the list goes on.  But when was the last time that you reviewed your policy limits and confirmed that you have enough insurance?  Or the right type of insurance policy riders?

What does insurance have to do with HoganWillig?  Good question.  Rest assured that we are not pitching a new product to you.  Working in the personal injury field, we see firsthand the consequences that result from inadequate or incorrect insurance coverage, and we want to make certain that HoganWillig clients limit their potential for experiencing the same stark prospect.  The purpose of personal injury law is hold a person accountable for injuries caused to another person, one phrase describing this is “to make the injured person whole”, or as close as possible to how that person was before the accident.  The amount of money it takes to make a person whole is unrelated to the amount of insurance that is available for that purpose.

In just this past year HoganWillig has secured for injured clients verdicts that exceed the amount of insurance that the defendant had available for purposes of paying the verdict.  In one case, the verdict exceeded the insurance by almost $6,000,000, in a second case the verdict was about $10,000 over the policy limits.  For each scenario, we are permitted, by law, to collect from defendant’s personal assets the amount of the verdict not paid for by insurance.   Sometimes this happens by garnishing wages, sometimes other assets of a defendant must be seized and sold. Pursueing defendants’ personal assets in this manner is not a pleasant task, nor does it result in a “windfall” to the injured person.  When the money is needed by a client to, for example, modify his home to accommodate his physical disabilities caused by the other person’s negligence, the need to pursue the assets is obvious, but no less regrettable.

In another case in our office, the insurance policy of the driver who struck our client (causing a broken neck, six fractured ribs, a collapsed lung, and a fractured pelvis among other injuries) wasn’t enough money to pay for the hospital bills that the no-fault insurance didn’t pay or for modifications that might be needed for our client’s home due to the injuries she sustained.  Fortunately, our client had a rider on her own automobile insurance policy that let her access her own policy limits that will pay for the needed remodel to her home.

While the odds are you’ll never have a verdict of $6,000,000 rendered against you, the possibility of having to pay $10,000 because of a shortfall in insurance is more likely, and not many of us can absorb such a financial blow without having to make an adjustment in our budget or otherwise feeling its effect.  Sufficient insurance will prevent you from being in a position where a person must weigh his or her present, and future, needs against inflicting further damage to your financial health.

Many of us are aware of umbrella policies, though few of us have them because they seem to be for the super-rich.  This is a common misconception.  With medical costs rising, labor costs for health-care aides likewise going up, an umbrella policy is worth the modest cost added to your insurance.  A requirement may be that you have your insurance on your home and automobile with the same company.

An often over-looked modification to your auto insurance policy is Supplemental Uninsured/Underinsured Motorist coverage (SUM) that lets you tap your own policy when the other driver (who is at fault) has a policy amount that is too low to make you whole.  These simple measures can have you in a better position to withstand a potential financial nightmare.

A cautionary note – insurance policies are very time-sensitive, so if you think you may be involved in a lawsuit, as an injured plaintiff or potential defendant, contact your insurance company immediately.  If you are unsure, call HoganWillig’s Personal Injury Department so we can help you put the insurance companies on notice and you can receive the coverage you’ve already paid for, a process that will provide you with the best chance to protect your assets.

If you have general questions about your policy, we encourage you to call your insurance agent or an independent insurance broker.  If they don’t answer your questions to your satisfaction, contact our personal injury department at 716.636.7600 and ask to speak with John Licata.

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