I dislike insurance companies. I really do; and that’s why it pains me to strongly advise that we spend a few more dollars to purchase additional coverage from our insurance companies.

If you live in Bergen County, you probably own or lease at least one motor vehicle and rent or own an apartment or home. If so, you certainly have an auto policy that includes “uninsured” and “underinsured” coverage and a homeowner’s policy. Further, many of us also have an “umbrella” policy that affords coverage after the limits of the auto or homeowner’s policy are exhausted. You probably purchased that “umbrella” policy with the thought of protecting yourself from an excess judgment in the event you cause an accident. But does your umbrella policy include excess “uninsured” and “underinsured” coverage? If not, you’re making an enormous mistake by failing to protect your family by not having adequate insurance coverage. If your insurance company does not offer an “umbrella” policy that includes excess “uninsured” and “underinsured” coverage, find a new insurance company. If your insurance broker tells you that additional coverage is not necessary, find a new broker.

It is awful when I represent a seriously injured client with little or no means of recovery against a drunk, texting or negligent defendant. For example, a 40 year old physician stopped at a red light and his vehicle was rear-ended by a drunk driver. Let’s pretend that the doctor fractures his right wrist as a result of the impact, needs multiple surgeries, develops arthritis, and can’t work for three years. Obviously he deserves significant compensation. However, who compensates him? Clearly, the drunk driver/defendant’s insurer would have to make a payment in this case. But what if that driver only had a minimal liability policy of $15,000?

Let’s further assume that the full value of the physician’s law suit is $1,500,000 (in order to compensate the physician for his loss of income/earning capacity, future medical costs, and past and future pain and suffering). That’s why we all need to inspect our auto and umbrella insurance policies and make sure we have excess “uninsured” and “underinsured” coverage.

If the physician had a $500,000 underinsured auto policy, he could first collect the $15,000 from the drunk driver’s insurer, and then collect another $485,000 from his own insurance company via the underinsurance provision of his policy. However, that’s still only 1/3 of the value of his case. Conversely, if he had a $1,000,000 “umbrella” policy that included excess “underinsured” coverage, he could collect that additional $1,000,000 from this policy. In that scenario, the physician would have been able to collect the full ($1,500,000) value of his case. If not, he’d be limited to the $500,000 previously referenced.

Go check-out your “umbrella” policy. Does your “umbrella” policy include excess “uninsured” and “underinsured” coverage? If not, please adequately protect your family.

By Marc J. Rothenberg, Esq.