It was about 8:30 p.m. on a Friday evening. Tony, who was delivering for one of the meal delivery services, is on his way home from his last drop off of the evening. He’s on a busy two-way thoroughfare, looking forward to tucking his young son in for the night, having dinner and spending the weekend at the shore. In an instant, the driver in the oncoming lane, laboring under the influence of heroin, crossed the double yellows and plowed into Tony’s front end. Tony was traveling at around 45 mph, the other driver 60 mph. The result was two deaths.
Unfortunately, these types of cases arrive in our offices all too often. Sometimes the consequence of the crash is death, oftentimes severe injury, including brain injuries that leave the injured party without an ability to earn a living, to take care of activities of daily living on their own and the ability to enjoy life the way they once did.
We don’t have the ability to make things right for those injured by the negligent choices made by others. The best we can do is recover the monetary “equivalence” of what has been lost—to the extent that is discernable by mere mortals. Compounding the underlying tragedy is the reality that often the negligent, often impaired, driver has little or no assets or insurance. One of the worst parts of this job is telling critically injured individuals that you have little or nothing you can do to help make their situation better.
The one thing that can make a bad situation a little less so is underinsured motorist coverage, especially if there is an umbrella policy available to enhance those limits. Oftentimes, the first the injured client has heard about either insurance coverage is when they are sitting across the conference room table (or on the other end of a Zoom conference), learning about their options.
Underinsured motorist insurance provides coverage for a driver’s injuries caused by another when the individual who was liable for another’s injuries has either no insurance (uninsured) or whose insurance is less than the injured party (underinsured). When you buy a policy of liability insurance, the law requires that the insurance company provide you UM coverage in an equal amount. For example, if Tony has an automobile policy with $100,000 of liability coverage, then he automatically has coverage of up to $100,000 if he (or someone in his car) is injured up to the extent the offending driver has less than $100,000 in coverage. So, if the negligent driver had $25,000 of insurance, and Tony had $100,000 limits, then his estate can recover $25,000 from the negligent driver and $75,000 from Tony’s UM coverage.
While $100,000, or even $250,000 provided sufficient coverage maybe forty or fifty years ago, it does not go far today. Umbrella coverage is one way to extend the insurance coverage protecting the injured driver or occupant of a covered car. An umbrella policy, usually issued with limits of $1-$2 million in coverage (although $5 million or more in coverage is not extraordinary) provides another layer of coverage above and beyond the primary limits of the policyholder’s other insurance limits. For instance, a $1 million umbrella policy increases the limits of your UM coverage to $1 million as well such that in the above example Tony’s estate could recover $25,000 from the other driver’s insurance, $75,000 from his UM coverage and $900.000 from the umbrella coverage that increased the limits of the underlying policy.
In New Hampshire, insurance companies that issue umbrella coverage must have the umbrella limits apply to enhance the limits of the policyholder’s UM coverage by the amount the umbrella policy unless the insured waives that enhancement in a signed writing. In other words, an insurance company cannot sell an umbrella policy that excludes UM coverage unless that fact is disclosed and specifically accepted by the insured. Umbrella policies are relatively inexpensive at around $400 to $600 for $2 million in umbrella coverage and the reduction in price for the exclusion of UM coverage is relatively small.
As attorneys who understand the above equation, we owe it to our friends, families, co-workers and communities to explain Umbrella coverage is also relatively inexpensive, costing around $500 a year—an amount that can seem like a lot, but when you need it, the investment is invaluable.