A horrific accident involving nine teenagers occurred at approximately 5:00 A.M. on Wednesday, June 30, 2010, in Steuben County, New York (near Corning).  Aside from highlighting the dangers associated with underage drinking and teen drivers, the accident raises several critical insurance coverage issues that every parent should understand.

According to the Elmira Star Gazette (full article pasted below, nine teens were injured in a one car accident in the Town of Hornellsville following an underage drinking party.

The parents of the nine injured teens are facing — or surely will face — tough questions with respect to how or if their children will be compensated as the teens begin the long road to recovery.

In general, parents of children injured in one-car motor vehicle accidents involving multiple passenger need to be aware of the following insurance coverage information:

1.  BASIC NO-FAULT COVERAGE — New York State Insurance Law requires every driver to provide at least $50,000 of Personal Injury Protection (“PIP”) to each passenger of his vehicle regardless of whether he caused the accident or not.  This type of insurance is generally referred to as “No Fault Insurance” because it is triggered even if the driver was not at fault.

What does this mean?  Every passenger in a vehicle is entitled to $50,000 of PIP coverage under the driver’s insurance policy in the event the passenger is injured in an accident.  In general, PIP covers economic losses such as lost wages and medical bills.

Why is this important?  Here, assuming the driver had proper insurance coverage, all nine teens (the driver is entitled to PIP benefits as well) are likely entitled to receive up to $50,000 to compensate them for their economic loss.  In addition, a passenger may be able to collect No Fault PIP benefits under his own policy once PIP iunder teh driver’s policy is exhausted.  This is called “stacking” PIP coverage, and it often allows a passenger to receive up to $100,000 to cover economic loss.

2.  ADDITIONAL NO-FAULT COVERAGE — Residents of New York are also free to purchase additional No Fault coverage in the event they or members of their families are seriously injured in an accident and their economic losses exceed $50,000.  The two primary types of additional coverage are called Additional Personal Injury Protection (“APIP”) and Optional Basic Economic Loss Coverage (“OBEL”).

What does this mean?  If you or a family member are seriously injured in an accident and your economic loss — again, I am primarily talking about lost wages and medical benefits — exceed the available PIP coverage ($50,000), APIP and OBEL can be triggered to cover your excess expenses.  In addition, as a passenger you may be able to collect against the driver’s APIP and/or OBEL coverage, depending on how the policy is written.

Why is this important? According to the Star Gazette article, at least three of the teens suffered serious injuries and were helicoptered to Strong Memorial Hospital.  A helicopter ride alone generally costs around $2,500, and it is safe to assume the medical bills for these teens could approach $50,000 very quickly.

The passengers first need to determine whether the driver had APIP or OBEL coverage.  If so, it is possible the passengers could be compensated for additional economic loss under the driver’s policy, depending on how it was written.

Next, if the teens’ parents have APIP or OBEL coverage, the teens will likely be considered “Resident Relatives” and will meet the standard to be named an “eligible injured person” under their parents’ polices.  (Important tip — MAKE SURE YOU HAVE APIP AND OBEL NO FAULT COVERAGE.  At Ziff we are willing to review your insurance policy FOR FREE. Just stop in or email us a copy of your policy to info@zifflaw.com.)

3.   LIABILITY COVERAGE— In addition to no-fault coverage, New York State Insurance Law requires all drivers to carry at least $25,000/$50,000  liability coverage.  What does this mean?  It means every driver on the road in New York is required to provide at least $25,000 of coverage to any one injured person for non-economic loss(things like pain and suffering, serious disfigurement and loss of enjoyment of life) because of his negligence.  If more than one person is injured, the total maximum recovery is limited to $50,000 regardless of whether two people are hurt or whether 20 people are hurt.  If there are more than two people hurt, those people would have to split the $50,000 “pie”.

Of course, drivers are permitted to carry — and, in my opinion, SHOULD carry —  much higher liability coverage.  Why is this important?  In an accident such as this — where I am speculating at least eight people sustained serious injuries due to the driver’s negligence — it is possible the maximum amount of liability coverage available to compensate their non-economic losses  is only $50,000, in the event the driver only had a minimum policy.  In other words, unless the driver had enhanced liability coverage, the seriously injured passengers may only have a total pot of $50,000 from which to be compenstated for their non-economic losses.

4.  THE MOST IMPORTANT COVERAGE I HOPE THE PASSENGERS CARRIED– SUPPLEMENTAL UNDERINSURED MOTORIST’S (SUM) COVERAGE— Fortunately, like No Fault, residents may purchase Supplemental Underinsured Motorist Coverage (“SUM”) to avoid the situation described above.  SUM policies of $250,000/$500,000 or $5000,000/$1,000,000 or even higher can be added to almost any insurance policy, and generally cost less than $15.00 PER YEAR.  In my opinion, this is the best money you could spend to make sure you and your family are best protected in the event something really bad happens.

What does this mean?  In the event the driver who caused an accident does not have enough liability protection to fully compensate the people whom he injures, the injured person can trigger his own SUM policy once the full amount of the driver’s policy has been tendered.

Why is this important?  If the Steuben County teens have sustained serious injuries and the driver has a small liability policy, it is likely at least some of the injured teens are not going to be fully compensated for their non-economic losses.   If the teens’ parents have SUM policies, it is possible the teens could meet the “Resident Relative” standard (described above), and trigger their parents’ additional liability coverage.

HOWEVER, New York law is tough in this regard.  In a recent case, the New York Court of appeals held an insured’s SUM policy is NOT triggered unless the amount of the SUM policy is greater greater than the liability policy of the negligent driver, even if the injured party actually collects less than the SUM coverage because of multiple claimants.

Clearly much of this blog post is speculative, but it gets to the heart of some of the most pressing insurance questions.  Bottom line — parents need to protect their families!  Make sure you have adequate No Fault coverage — including APIP and OBEL — and spend the extra dollars each year to buy the biggest SUM policy possible.  Hopefully you will never need it, but if the day comes you will sure be glad you are protected.

I will be following the developing news about this crash and will provide updates as they become available.

Again, bring your insurance policy to Ziff Law at ANY TIME and we will review it for free.  It may be most worthwhile 5 minutes of your entire week!

Thanks for reading,

Christina Bruner Sonsire

Christina Bruner Sonsire, Esq.
NY & PA Injury & Malpractice Lawyer
Ziff Law Firm, LLP
303 William Street
Elmira, New York 14902-1338
csonsire@zifflaw.com
Office: 607.733.8866
Toll-Free: 800.ZIFFLAW (943.3529)
Web: zifflaw.com

Here’s the Elmira Star-Gazette article:

Nine teens packed into car are injured in crash

Nine Steuben County teens packed into a small sedan were injured — six of them seriously — in a one-car accident Wednesday morning in Hornellsville.

County Sheriff Joel Ordway said the car, a 2004 Chevrolet Cavalier, was speeding west on county Route 109 when the driver lost control on a sharp curve about a quarter-mile east of Lain Road and drove into a ditch.

The car continued about 135 feet, struck a concrete culvert, became airborne for 25 feet, overturned and landed on its side in a driveway, deputies said.

Ordway said the crash occurred about 2 miles from the underage drinking party, which was a birthday party. He said alcohol and the car’s speed were factors in the accident.

When emergency responders arrived at the scene, they found nine teens “on top of each other” inside the car, Ordway said.

It was not clear where in the car each of the teens was seated before the crash, though Ordway said they were likely “on top of one another” before the crash. Nobody was riding in the trunk, he said.

Ordway said he knows who was driving, but was not ready to release that information Wednesday afternoon because the investigation is still in progress.

“We’re just going to continue with the investigation,” Ordway said. “In the next couple days, we’ll have some charges, not only on the operator, but also on the source … who provided the alcohol prior to” the crash, he said.

Six of the nine teens in the car suffered serious injuries; one of them suffered a life-threatening head injury, Ordway said.

Emily S. Mayorga and Dylan Henry, both 18 and from Canisteo, and Taylear K. Maiello, 17, of Hornell were taken to Strong Memorial Hospital in Rochester by helicopter. All three were listed in guarded condition Wednesday, according to a hospital spokeswoman. Branden S. Mulhollen, 17, of Canisteo, also was taken to Strong for treatment. His medical status was not available Wednesday.

Bethany Jones, 17, and Carleenea L. President, 18, both of Hornell, were taken to Robert Packer Hospital in Sayre. Both were listed in stable condition Wednesday.

Ordway said the car was traveling between 71 and 78 mph at the time of the crash. The speed limit on the road is 55 mph, though the suggested speed on the downhill curve where the car left the road is lower, about 40 mph, he said.

County Road 109 was closed for several hours Wednesday.

The crash is reminiscent of another serious crash involving underage drinking in western Steuben County in 2007.

That September, three teens and a 21-year-old man were killed when a car hit a concrete abutment and went into Sugar Creek off of state Route 248 near Jasper. Police said all four had been drinking alcohol before that crash.