A New York appeals court has ruled that a party injured in an accident involving an uninsured motorist may collect damages from an at-fault third party, and that those damages will not offset any amounts to which the injured party is entitled under an uninsured motorists provision in his or her auto insurance policy.

In New York, as in other states, a motorist may add a rider to his or her insurance policy, providing a certain level of coverage in the event of an accident where the at-fault party either has no insurance or has little insurance. This clause is known as UM/UIM clause. Typically, those riders include a clause stating that the UIM “shall not duplicate” payments the injured party/insured receives from other parties. Accordingly, the practice in New York has been to allow an insurance company to reduce its payout on a UIM claim dollar for dollar for any amounts received from any other source. That appears to have changed.

In a ruling issued by the New York Appellate Division in June, the court found that the non-duplication clause did not mean that an injured party cannot seek full compensation by combining partial recoveries from several liable parties. In effect, the only time payments received from another source will offset an insurer’s responsibility under a UIM policy is when the amounts received from other sources exceed the total amount of damages.

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