The introduction of insurance against the risk of suffering bodily injury or death in a motor vehicle accident caused by a motorist with low insurance limits, widely called underinsured motorist coverage, was an important step toward securing adequate compensation for accident victims. Numerous questions have arisen regarding the scope and application of this new form of insurance, however. The authors believe that legal principles developed over several decades of experience with uninsured motorist (UM) coverage could, and should, serve as a guide for underinsured motorist cases.
As a leading jurisdiction in the development of insurance law, New York court decisions construing contracts of underinsured motorist coverage could be expected to have far-reaching influence. Most New York decisions to date, however, fail to recognize the transferability of UM coverage precedents to the new coverage form. As a result, rather than a smooth transition toan integrated scheme of uninsured/underinsured motorist coverage, there exists an unnecessary degree of uncertainty. Indeed, the two pertinent decisions of New York's highest court have opposing tendencies: the first emphasizes the legal relatedness of UM and underinsured motorist coverage, while the second inexplicably fails to extend UM coverage precedents to an important question for underinsured motorist coverage. In the hope of promoting stability and predictability for both insurers and the public, the authors attempt to point the way in this article toward a more rational and consistent view of this important new coverage.