What is S.U.M coverage, and why is it important?
Throughout the United States, there are millions of motorists who drive their cars without any automobile insurance, and in most states, in violation of the law. A substantial number of drivers carry the bare minimum amount of automobile insurance coverage required by law. If you or your family members are seriously injured in an automobile accident with one of these drivers, it is possible that you will not receive sufficient compensation for the injuries caused by the negligence of the other driver. In such cases, you may not obtain a sufficient recovery to protect your future medical, wages or financial needs.
I am often confronted with cases where seriously injured motorists are involved in collisions with negligence drivers without automobile insurance or with very little coverage. While drivers are not permitted to operate motor vehicles without minimum insurance limits, failure to comply with these statutory requirements is not a crime punishable by a prison term. If you are stopped by a police officer without proper insurance limits in effect, you will be issued a summons for this traffic infraction and usually have to pay a fine. Unfortunately, there is no greater punishment. While this is extremely unfair, there have been no legislative attempts to change this situation. The tragic results of being involved in an automobile accident with an uninsured or an underinsured motorist can be devastating.
It has been estimated that each automobile driver will be involved in at least three accidents during the course of his or her driving lifetime. Surprisingly, most drivers have not taken sufficient precautions within their control to protect themselves or their loved ones in the event of an accident. Most of us are more concerned about protecting our assets and property than ourselves. Accordingly, responsible motorists often purchase large insurance policies with excess coverage should they be sued by another driver with whom thy may get into an accident. These liability policies shelter our home and assets from judgements obtained by those whom we may accidently injure.
But what about ourselves and our passengers? How are we protected in the event that we are involved in a car accident with a motorist who has little or no insurance coverage? For a relatively small annual payment, approximately the price of a restaurant dinner for two, we can protect ourselves and our loved ones against other financially irresponsible motorists.
Underinsured motorist coverage, also known as supplementary uninsured motorist coverage (S.U.M), is under-insurance coverage that protects us against other uninsured or underinsured drivers who may cause injury in an automobile accident. The purchase of this optional coverage provides us with the same level of injury protection for ourselves and our passengers that we provide to others whom we may accidentally injure. In short, this coverage acts to supplement the other driver’s lower insurance coverage so that if the injuries we sustain are significant, there will be additional insurance for us to recover against.
SUM Coverage is the only insurance which the policyholder buys that affords them a larger recovery if the other driver has the $25,000 minimum coverage. To be clear, SUM coverage doesn’t only apply when the other driver has the minimum ($25K) but it applies whenever the driver has less coverage than you.
Why should we protect others to a greater extent than ourselves? Why doesn’t every driver possess this SUM coverage?
Without SUM coverage, we would be limited to the other motorist’s coverage limits if we are injured in an automobile accident. Therefore, if the other driver only has minimum coverage, we would only be able to obtain a minimum recovery. However, by purchasing this insurance coverage in advance from our own insurance company, we would be protecting ourselves from drivers who do not cover themselves with adequate coverage if they injure us. The best fact is that it is generally inexpensive. In fact, it is so important that the NYS Legislator and Governor require it be provided to equal one’s liability coverage UNLESS you opt-out of it. It has been available in New York State since July 1992 and is now viewed as one of the most important components if insurance since it protects us and provides for fair recovery if we suffer serious injury in an automobile accident.
61-year-old Doris and her husband got into their Honda Accord to run a few local errands. They were excited about planning their Thanksgiving dinner for their children and grandchildren. It was a blustery November afternoon. As they exited the Expressway on their way to buy a turkey, they were involved in an automobile accident. The driver of a Chevrolet Camaro, blaming the sun for impairing his vision, disregarded a red traffic light and drove into the passenger side of their car at approximately 40 miles per hour.
After the sirens stopped wailing and the emergency rescue squad has pried Doris out of the twisted metal, she was taken by ambulance to the medical center where she spent Thanksgiving in the intensive care unit. It took a very long course of rehabilitation for Doris to begin to reconstruct her life.
While this accident may have been fated, what occurred later was quite frustrating, unfortunate and avoidable. Doris, like most drivers, had the minimum basic medical and economic loss coverage on her own car. That covered her medical bills for the first few weeks in the hospital. But the other driver had no insurance. He was given a summons for his traffic violation and went on to live his life quite well, not having been injured in the accident. Doris had to supplementary under-insurance or un-insurance motorists (S.U.M) coverage. Within a month of the accident, she had exhausted her own insurance coverage and began to compile a large debt for which she became personally responsible.
Although the other driver negligently caused her injuries, Doris had no economically viable parties to sue. There was no money available for recovery if she had successfully sued the other driver since he had no money and no assets. In effect, he was judgement-proof. Doris was in a deep hole.
This type of financial disaster occurs more often than it should. It could be avoided if Doris had purchased S.U.M coverage. In her case, it would have covered her in this accident by making available an additional source of insurance to cover her bills and herself. It would have effectively provided the necessary coverage that the other driver should have carried at the time of the accident. This type of Insurance coverage functions to protect us against drivers without any insurance or with minimum policies. In sum, (no pun intended!), a little forethought and planning can serve to alleviate the potential financial hardship that can be suffered through no fault of our own!For instance, had Doris carried $250,000 in SUM coverage, she would have recovered $250,000 ($25,000 from the defendant’s insurer and the remaining $225,000 from her own SUM carrier). Some insurers offer larger SUM policies.
Alan J. Stern maintains a private law practice in Jericho, New York. He is a graduate of Hofstra University Law and Business Schools and is a member of the New York State Trial Lawyers Association, NYS Academy of Trial Lawyers, and both the Nassau County and Bronx County Bar Associations. He is an experienced litigator, who is admitted to the practice in both State and Federal Courts.