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Everyone knows you that New York State requires every motor vehicle, including motorcycles, to have liability insurance. That insurance protects the person that you injure through your negligent operation of a motor vehicle. In other words, if you get into an accident that’s your fault, injuring another person, you have money – your insurance policy – to compensate the person you negligently injured, so (hopefully) you won’t have to touch any of your savings to compensate the person. But what happens if someone injures you? What happens if it’s their fault?

In New York, the minimum amount of insurance someone can carry on their motor vehicle is $25,000. That means that if someone injures you, they may only have $25,000 to compensate you for your injuries. That might be enough if you suffered a fractured toe, but what if you suffered a fractured spine? What if you’re a surgeon and you suffered nerve damage and can no longer operate, or you’re a concert pianist and can no longer play? What if you’re the only wage earner in your family and your spouse and children have no one else to rely on for income? To make it worse, what if the person who injures you has no money apart from the insurance policy to compensate you, or if the person goes bankrupt? Then, you could be limited to just $25,000, and $25,000 is not a lot of money if you can’t work for the rest of your life. Because of that, New York allows insurance companies to sell an optional rider to your insurance policy called Supplementary Uninsured Motorist (“SUM”) coverage, which allows you to protect yourself from someone who doesn’t have enough insurance.

If you have a SUM rider on your insurance policy, you can obtain additional insurance coverage from your own insurance company (less the amount you have already received) after you have exhausted the coverage limits of the person that injured you.

Some examples will make it clearer how this works. Let’s assume you have a SUM rider on your own automobile insurance policy with limits of $100,000:

  • supposed the person that hit you has no insurance available to compensate you because the vehicle was uninsured, or the insurance lapsed or was canceled, or the person that hit you fled the scene, or operated a stolen vehicle, or operated the vehicle without the permission of the owner, or the person’s insurance company went out of business. In that case, you could turn to your own insurance company and collect a maximum of $100,000 of SUM insurance coverage
  • let’s say the person who injured you has a $25,000 policy. If you obtain the full $25,000 from the insurance company of the person who injured you, you can then turn to your company and obtain an additional $75,000 in SUM coverage ($100,000 – $25,000 = $75,000)

Remember, though, that you can only collect the difference between your SUM policy limit and the limit of the person that injured you. Imagine that the person that injured you had $100,000 in insurance coverage, and you had a $100,000 SUM rider on your insurance policy. In that case, you could not collect anything from your insurance company because your insurance limits are the same as the person that injured you.

There are some important things to know about seeking coverage from your own SUM insurance policy rider. First, you must get the permission of your own insurance company to settle the claim against the person who injured you, before you settle, even if you are collecting the full amount of that person’s insurance coverage. If you don’t get your insurance company’s prior permission, you will probably be prevented from collecting under your own SUM coverage, even though you have paid all the premiums for that coverage. Second, you must give your own insurance company timely notice of your injury in the collision. Usually, that means within 90 days of the injury (assuming you’re physically able to do so), but every policy is different so you should read you policy carefully and give notice as soon as possible. Third, you must give your own insurance company all of the paperwork regarding your claim against the person that hit you (including your medical records) and fill out a bunch of forms, and if you bring a lawsuit against the person that hit you, you will be required to give your insurance company copies of every document you receive and generate in your lawsuit against the person that hit you. There are other restrictions and requirements too numerous to list here, so you should not attempt to settle a claim against the person who injured you without first hiring an attorney.

If you cannot come to an agreement with your own insurance company about how much SUM money you should receive for your injuries, you we will not have to bring a lawsuit against your insurance company. Instead, New York law requires you to bring an arbitration proceeding through the American Arbitration Association. That is much faster and cheaper, and usually works to your benefit, rather than bringing a lawsuit in Supreme Court.

The New York State Bar Association puts out a very nice summary of SUM coverage in New York.

The extra cost for the SUM rider on your insurance is minimal, but you have to ask for it from your insurance company. This coverage applies not only to the owner of the vehicle, or the policyholder, but anyone who lives in his or her household, including spouses, children, parents, and other dependents. Everyone should have SUM coverage riders on their insurance policy! Call your agent today to find out if you have it.