If you could change one thing about your auto insurance policy before your next accident, it should be your SUM coverage. That single decision — which costs roughly a dollar a week at meaningful limits — can be the difference between a $25,000 recovery limited by the at-fault driver’s minimum policy and a $250,000 recovery funded by your own coverage. In today’s economic environment, it is reported that as many as one in seven drivers on the road is uninsured or carrying only the minimum. Across New York City and Long Island, where driving conditions produce routine encounters with inadequate coverage, your SUM and UM coverages are your protection against those drivers.
These two coverages — UM and SUM — are the most misunderstood components of a New York auto policy. Many drivers do not know they have them. Many others have them at inadequate limits. Many do not understand the difference between them. All of this matters because when an accident happens and the at-fault driver has nothing or not enough, these coverages become the entire source of recovery. If you do not have them, you do not have a recovery. It is that simple.
SUM coverage: how it works and why it matters most
Supplemental Underinsured Motorist coverage protects you when the at-fault driver has insurance but not enough to cover your damages. SUM is triggered when the at-fault driver’s liability limits are less than your SUM limits. If the at-fault driver has $25,000 in liability and your SUM limits are $250,000, you collect the $25,000 from the at-fault driver’s policy and then file a SUM demand for arbitration with your own carrier for additional recovery up to $250,000 minus the $25,000 already received. The net available SUM recovery in that scenario is $225,000.
SUM limits are tied to your liability limits. You cannot carry SUM coverage higher than your liability limits under New York insurance regulations. If your liability limits are $100,000/$300,000, your maximum SUM is $100,000/$300,000. If your liability limits are the $25,000/$50,000 minimum, your SUM is capped there too. This is why higher liability limits matter in both directions — they protect you from claims by others and they raise the ceiling on your own SUM protection.
Multiple SUM policies may apply to a single accident. Your own auto policy carries SUM. The policy covering the vehicle you were riding in may carry SUM. Household policies covering other vehicles you own may carry SUM. In some cases, these policies stack — meaning the combined SUM limits are available up to the total of the stacked policies. In other cases, only the highest single SUM limit is available. The stacking rules depend on the specific policy language and the facts of the case. Identifying every applicable SUM policy is essential because each one represents additional potential recovery.
UM coverage: protection against uninsured and hit-and-run drivers
Uninsured motorist coverage is your only protection when the at-fault driver has no insurance or cannot be identified. Hit-and-run accidents, accidents involving unlicensed drivers, accidents involving vehicles with lapsed policies, and accidents where the at-fault driver’s carrier denies coverage for policy reasons all trigger UM coverage. New York requires a minimum of $25,000/$50,000 in UM, matching the minimum liability limits. Like SUM, UM is available up to your liability limits and resolved through arbitration against your own carrier.
Hit-and-run cases have special requirements. UM coverage in a hit-and-run case typically requires that the accident was reported to the police within 24 hours and that physical contact occurred between the hit-and-run vehicle and the claimant or the claimant’s vehicle. The physical contact requirement is strictly enforced under New York law. If a vehicle swerved to avoid a hit-and-run driver and struck a guardrail, but the hit-and-run vehicle never made physical contact, the UM claim may be denied. Report the accident immediately and document the physical contact if it occurred.
The SUM and UM arbitration process
Both SUM and UM claims are resolved through arbitration, not through a lawsuit in court. You file a demand for arbitration against your own carrier. Your own carrier assigns defense counsel who will defend the claim just as vigorously as if you were suing a stranger. This is critically important to understand: the carrier is on the opposite side of the claim, even though it is your own carrier. The SUM or UM claim is adversarial. The carrier’s counsel will challenge liability, argue comparative negligence, contest the serious injury threshold, and minimize damages with the same aggressiveness as any defense in a standard personal injury case.
The arbitration hearing covers liability (whether the other driver was at fault and your share of fault under comparative negligence), the serious injury threshold under Section 5102(d), and damages. The arbitrator’s award is binding, with very limited grounds for appeal. The process typically moves faster than a lawsuit — months rather than years — but requires the same level of preparation. The same medical evidence, the same threshold proof, the same damages calculation. An arbitration is not a simplified proceeding. It is a full adversarial hearing with a different decision-maker.
The carrier will not identify your SUM or UM coverage for you
The at-fault driver’s carrier evaluates the claim against its policy. That is all it does. It does not search for additional coverage that might benefit you. It does not review your policy for SUM or UM. It does not check whether the vehicle owner has a separate policy. It does not investigate whether the at-fault driver was working. Identifying every source of coverage is your responsibility — or your attorney’s. Many people do not discover they have SUM or UM coverage until an attorney requests their declarations page and reads the policy.
The failure to identify SUM coverage is one of the most common and most damaging mistakes in New York car accident cases. A serious injury case against a minimum-policy driver becomes a $25,000 case if no SUM coverage is identified. The same case becomes a $250,000 case if SUM coverage is identified and pursued. The difference is not marginal. It is the entire outcome.
Review your coverage now — before the next accident
The time to review your auto insurance coverage is not after an accident. It is now. Call your agent. Ask what your liability limits are. Ask whether you have SUM and UM coverage and at what limits. Ask about OBEL. Ask about umbrella coverage. It is surprisingly inexpensive to purchase additional coverage. The premium differences between minimum coverage and meaningful coverage are usually far smaller than people expect. The consequences for you and your family of not having adequate coverage can be devastating. Do not wait. Call your insurance agent today.
If you already have an auto policy, request a declarations page and review it. The declarations page shows the coverage types and limits you currently carry. If you cannot understand the declarations page, ask your agent to explain it in plain terms. If you do not have SUM coverage, or if your SUM limits are low, ask what it would cost to increase the coverage. The answer is often much less than expected.
Reviewing your own policy before you need it
The time to review your SUM coverage is before the accident, not after. Most policyholders have no idea what their SUM limit is until they are injured and their attorney pulls the declarations page. Call your agent or log in to your insurance carrier’s website and look at the declarations page. Find the SUM line. If the number is $25,000 or $50,000, consider increasing it. For a modest additional premium, you can carry $250,000, $500,000, or $1 million in SUM coverage. That is the coverage that pays you when another driver with minimum coverage causes your injury.
The cost-benefit analysis is straightforward. The additional annual premium for raising your SUM from $50,000 to $500,000 is typically a few hundred dollars. The additional recovery available if you are seriously injured by a minimum-coverage driver is $450,000. This is among the most cost-effective insurance coverage available — you are buying protection against the likelihood that another driver will not have enough coverage to compensate you for a serious injury.
Offset rules and how carriers calculate what they owe
SUM coverage in New York is typically structured as an offset policy: the SUM carrier owes the difference between the plaintiff’s damages and the amount already recovered from the at-fault driver’s policy, up to the SUM limit. If the plaintiff has a $250,000 SUM limit and recovers $25,000 from the at-fault driver’s minimum policy, the SUM carrier’s maximum exposure is $225,000. Some policies are structured as non-offset policies that pay up to the SUM limit without reduction for the underlying recovery, but offset is the more common structure in New York.
The carrier’s evaluation of the SUM claim starts with the full damages, then applies any applicable offsets, comparative fault reductions, and threshold issues the same way the at-fault carrier would have. Understanding how the offset works prevents surprise at settlement — and understanding that the SUM carrier evaluates the claim adversarially, even though it is the policyholder’s own carrier, prevents the mistake of treating the SUM claim as a cooperative process rather than a litigated one.
How Schwartzapfel Holbrook identifies all available SUM and UM coverage
At Schwartzapfel Holbrook, we see the consequences of inadequate coverage in case after case. A driver with devastating injuries caused by someone carrying only the minimum, with no SUM coverage on their own policy, faces a recovery capped at $25,000 regardless of the damages. We identify SUM and UM coverage in every case within the first week. We review our client’s own policy, the policy covering the vehicle they occupied, and household policies for additional coverage. SUM claims are where the most significant recoveries come from in cases involving underinsured drivers — and they are the most commonly overlooked source of recovery in New York auto accident law.
Schwartzapfel Holbrook / Fighting For You