I recently met with a few attorneys at the Mandelbaum Salsburg firm in Edison NJ. Our discussion included the fact that homeowners who purchase umbrella policies are not aware of the fact that most umbrella policies do not provide coverage over and above for Uninsured/Underinsured motorists. Nicholas J Waltman, an attorney with the firm provided me with the following article to share with you. He makes some excellent points regarding NJ Auto insurance and the importance of checking your umbrella policy.
Catastrophic Injuries Cause Catastrophic Losses. The Necessity to Have an Umbrella Policy WITH
UM/UIM Coverage.
By: Nicholas J. Waltman, Esq.
Mandelbaum Salsburg, Personal Injury Department 510 Thornall Street, Suite 180, Edison, NJ 08837
Auto insurance is required in the State of New Jersey. While most automobile accidents are relatively minor, automobile accidents resulting in serious injury or death can place substantial physical, psychological, and financial burdens upon those injured and/or their family members. Having adequate UM/UIM coverage is just one part of making sure you’re protected on the road. UM stands for ‘uninsured motorist’ coverage. UIM stands for ‘underinsured motorist’ coverage. These are types of coverages that are on your own automobile insurance policy. If you are injured by a negligent driver who does not have liability insurance or inadequate liability insurance, you may make a claim with your own insurance carrier if you have UM/UIM coverage. The maximum UM/UIM coverage in New Jersey is $500,000.
Most people have an umbrella policy to protect their assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. In a case where an uninsured or underinsured motorists causes an accident and does not have the coverage required to pay for your injuries, you would typically need to have uninsured/underinsured motorists coverage in place to receive that benefit. Excess UM/UIM from a personal umbrella policy pays after the auto policy’s UM/UIM limits have been exhausted. It is very important to understand that most umbrella policies DO NOT cover uninsured motorists. Most available umbrella insurance policies apply only to situations in which YOU are held liable to another party, and do NOT apply if you are the victim of another’s negligence. Therefore, you must insist upon and obtain umbrella coverage that contains UM and UIM coverage, which will apply regardless of who is negligent. If you have already purchased an umbrella insurance policy, you must read your policy and determine if it contains UM and UIM coverage.
Consider this example: as a result of an automobile collision caused by a drunk driver, you sustain significant injuries which threaten to render you seriously impaired for life. Your pain and suffering,
past and future lost wages are estimated at over two million dollars ($2,000,000). If the drunk driver failed to carry automobile liability insurance and had no viable personal assets,
you will recover NOTHING from the negligent uninsured drunk driver. If you had the maximum UM/UIM coverage you would only receive $500,000. That’s only a quarter of what is necessary to compensate you
and your family for your injuries. If you had an umbrella insurance policy with UM and UIM coverage, once you obtained the maximum limit from the drunk driver’s insurance carrier (if any) and your primary UIM/UM insurance policy, you would be able to recover under your umbrella policy. Supposing you maintained a $2 million dollar umbrella, you would be fully compensated.To summarize, I strongly recommend you check your insurance to ensure you have the maximum amount
of UIM/UM coverage that you can afford and if you have already obtained an umbrella policy, ensure that your umbrella policy provides UIM/UM coverage irrespective of who is negligent and/or
request an additional umbrella policy that provides UIM/UM coverage. Following these steps will best protect you and your family for that day that hopefully never comes.
Great article, Nick.
For more information contact The Speakman Agency at 732-259-7816 or send us an EMAIL and we will review your current umbrella policy for you.
