Recent stories in the news have put the spotlight on a real danger — the high number of underinsured drivers on the roads. According to the Department of Banking and Insurance, an estimated 400,000 motorists in New Jersey have no insurance at all, 464,000 carry only the legal minimum, and one million carry limits that are higher than the minimum but have failed to keep up with inflation. This means that one in three drivers on our roads is underinsured.

The sky-high cost of automobile insurance is, of course, partly to blame. New laws may eventually bring us some relief from the high rates. Meanwhile, the correct response to the cost of insurance is not to reduce your coverage. In fact, you need to be certain that you are not that one underinsured driver in every three — they expose themselves and their families to financial catastrophe.

How much auto insurance should you buy? There is no simple answer. Most people try to buy enough liability insurance to protect their assets in case they are sued for causing an accident. Liability insurance protects your home and your savings from lawsuits when accidents occur.

What most people don’t know is that the amount of liability insurance you have determines how much uninsured/underinsured motorist insurance you can get. Uninsured/underinsured motorist coverage protects you if you are injured by a driver with no insurance or someone whose coverage is inadequate to compensate you for your injuries. In addition to any physical injury you might sustain, your loss of wages is also covered under this clause.

Under the current law, you can only obtain uninsured/underinsured coverage up to the limits of your liability coverage. That’s why the amount of liability coverage you buy has importance beyond protecting your assets. But don’t assume that your insurance company will automatically match the amount of your uninsured/underinsured coverage with your liability coverage. They won’t.

We have reviewed many policies with adequate liability limits ($300,000) but only minimum uninsured/underinsured limits ($15,000). We always recommend that clients with policy deficiencies in this area increase their coverage. Adding underinsured coverage can be less costly than you think, too. For example, increasing liability and uninsured/underinsured motorist coverage from $100,000 to $500,000 on two cars may add only $147 per year to your premium.

We urge you to review your auto insurance coverage with your agent. Paying particular attention to the amount of liability and uninsured/underinsured motorist coverage in both areas makes financial sense for you. Unfortunately, accidents do happen. Don’t find out by accident that you are underinsured.

Steven Blader and Craig J. Hubert, partners practicing in personal injury law at Szaferman Lakind Blumstein Blader & Lehmann, P.C., 101 Grovers Mill Road, Lawrenceville, NJ 609-275-0400.

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