NY State Law Regarding Supplemental Uninsured/Underinsured Motorist (SUM) Insurance Coverage

When evaluating the potential value of a Manhattan car accident claim there are numerous things to consider. What are the nature and extent of the plaintiff’s physical injuries? Was surgery required? The amount of her medical expenses. And don’t forget lost wages that were not fully covered by no-fault and potential loss of future income due to partial or permanent disability.

These factors are important in determining the value of an injured party’s claim. However, putting a reasonable dollar amount on a case does not necessarily mean that the Plaintiff will receive a check for that amount, even if there is a jury verdict in their favor. There has to be insurance available to cover the amount a jury awards.

The limits of the negligent driver’s liability insurance policy is extremely important. If the plaintiff’s case is worth more than the defendant’s liability limits, then the injured party may be able to look to their own insurance policy if they have supplemental underinsured policy limits that are grater than the at fault party’s policy limits. That is why increased limits of UM/UIM coverage in your own policy are so important and worth looking into. The increased coverage you can pay for by and through your own insurance policy is usually not that expensive.

In a recent lawsuit venued in the Supreme Court in upstate NY, the injured party was involved in a motor vehicle accident that was caused by the negligence of the other driver who rear-ended their vehicle. The injured party who had been rear-ended had an insurance policy with supplemental uninsured/underinsured motorist (SUM) coverage which he had purchased from his own insurance company. The policy limits of the injured party’s SUM policy were $300,000 per person and $300,000 per accident, commonly referred to as SUM limits of $300k/$300k. The injured party settled his personal injury claim against the driver of the car that struck him in the rear for $100,000, which was tortfeasor’s policy limit in effect at the time of the accident.

Thereafter, the injured party looked to his own insurance policy’s SUM coverage which was greater than the $100k that the tortfeasor had, but like any good insurance company would, his own insurance company denied his claim, claiming that his own SUM coverage hadn’t been triggered. The court that heard the case denied the injured party’s attempt to compel his own carrier to provide SUM coverage and he then appealed to the higher court.

The NY Appellate Division reversed the lower court’s ruling. Under New York Insurance Law § 3420(f)(2), a driver may, through SUM coverage, seek to obtain the same level of protection for himself as he has against liability toward others. Under this law, SUM 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.”

Here, the plaintiff’s SUM coverage was three times that of the at-fault driver’s liability coverage. Thus, SUM coverage was triggered according to the Appellate Division’s decision.