SUM Coverage: You Need It, But Your Insurance Broker Never Told You About It
In our practice, a large majority of our clients come in for consultations and profess how they have “full coverage” with some of the big name insurance companies. Upon further inspection of their automobile insurance policies, they have minimal or state-mandated SUM coverage of $25,000.00. Insurance Brokers often tell their customers how they are sufficiently protected, but often times they are referring to their customer’s liability coverage; i.e., how their customers are protected when they cause an accident that leads to injuries.
However, these liability limits don’t apply to situations where the customer is an injured party that is struck by a hit-and-run vehicle or a vehicle that is uninsured/minimally insured. Rather, SUM or Supplementary Uninsured/Underinsured Motorist Coverage is the coverage that protects the victims of these types of incidents. While increased SUM Coverage limits can create a higher monthly premium, they protect injured drivers and passengers from the aforementioned hit-and-run or uninsured/underinsured accidents.
New York State solely mandates $25,000 in coverage for these hit-and-run or uninsured/underinsured accidents. However, in catastrophic incidents involving hit-and-run accidents or with uninsured or underinsured vehicles, this amount of coverage is often insufficient.
If an injured party was involved in a hit and run accident, they would be permitted to make a claim against their own automobile insurance policy for the pain and suffering they sustained from the accident so long as they can establish (1) that contact was made between their vehicle or person (in a pedestrian accident) and the hit-and-run vehicle and (2) police were notified of said accident within twenty-four (24) hours of its occurrence.
If an injured party was involved in an accident with an uninsured vehicle, they would have to prove (1) that contact was made between their vehicle or person (in a pedestrian accident) and the uninsured vehicle, (2) police were notified of said accident within twenty-four (24) hours of its occurrence and (3) that the other vehicle was not insured at the time of the accident.
If an injured party was involved in an accident with an underinsured vehicle, they would have to prove (1) that contact was made between their vehicle or person (in a pedestrian accident) and the underinsured vehicle, (2) police were notified of said accident within twenty-four (24) hours of its occurrence and (3) that the other vehicle’s liability limits were lesser than their Supplementary Underinsured Motorists’ Coverage limits. In order to make a Supplementary Underinsured Motorists claim, the injured party would first have to exhaust the negligent party’s liability limits either by settlement/jury verdict of the entirety of the negligent party’s liability coverage.
For example, if an injured party was a driver in a vehicle with SUM coverage limits of $100,000.00 that was struck by a vehicle with a minimal policy of $25,000.00 and their injuries were worth far in excess of $25,000.00, they would have to obtain a settlement or verdict of $25,000 or greater before being able to make a claim against their owner Supplementary Underinsured Motorist Coverage. Furthermore, they would only be able to recover a maximum of $75,000.00, which is the difference between their Coverage Limits and the other party’s liability limits.
As per every New York Automobile Insurance Policy, the venue for these Uninsured or Underinsured Motorist Claims to be heard is American Arbitration Association, which is set forth in an “arbitration clause” in the automobile policy you agree to bound by. We will cover this Process of filing a SUM claim with American Arbitration and what to expect from this process in an upcoming blog post.
If you’ve been involved in a hit and run accident or an accident with a vehicle with minimal or no insurance, call Hassin Law Group today at (516) 536 - 6067 for a free consultation.