What Are the Conditions to Be Fulfilled for Underinsured Motorist Coverage ?
In Matter of Prudential Prop. & Cas. Co. v. Szeli (83 NY2d 681, 684), the Court held that 'underinsured motorist coverage is triggered when the limit of the insured's bodily injury liability coverage is greater than the same coverage in the tortfeasor's policy.'
Even then, however, a claim for underinsurance need not be paid unless and until another 'condition precedent' is met, notably that 'the limits of liability of all bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements' (S'Dao v. National Grange Mut. Ins. Co., 87 NY2d 853, 854 [quoting Insurance Law 3420 (f) (2)]).
"Although in theory most automobile accidents carry a potential claim for underinsurance benefits, it takes time, investigation and analysis to determine whether one will actually result.
In the assessment a number of factors come into play, including the seriousness and nature of the insured's injuries (e.g., Matan v. Nationwide Mut. Ins. Co., 243 AD2d 978), the potential liability of multiple parties (e.g., Matter of Allstate Ins. Co. v. Sala, 226 AD2d 172) and of course the extent of a tortfeasor's coverage (e.g., S'Dao v. National Grange Mut. Ins. Co., 87 NY2d 853, supra).
Because these factors will vary from case to case, so too will the time at which an underinsurance claim becomes reasonably ascertainable.
Thus, although coverage is 'triggered' when the limit of the insured's bodily injury coverage is greater than the same coverage in the tortfeasor's policy, the acquisition of this information, the existence of other conditions and the occurrence of other developments do not always take place at a fixed time."