Explaining SUM Insurance Part 2

Posted: April 4, 2018

As explored in our last entry, uninsured motorist (“UM”) and supplementary uninsured motorist (“SUM”) insurance coverage act like safety nets, protecting you and your family.

A new law enacted December 18, 2017 has changed – we believe, for the better – the process by which motorists can purchase SUM/UM coverage.

The change, which applies to new policies issued after June 18, 2018, provides that amount of SUM coverage will, by default, equal the amount of liability coverage unless the policyholder affirmatively rejects the coverage, or purchases a lower limit.

Current law requires that policyholders affirmatively elect increased SUM coverage. The problem is that many policyholders are not aware of the value of SUM coverage until it is too late. A recent op-ed in the Staten Island Live drives this point home:

When Victor and Wilma Rao were hit by an ex-convict drunken driver in 2012, their world was torn apart. Wilma suffered broken bones and bruises, and she was the lucky one. Victor was in a coma for four weeks, followed by months of hospitalization and rehabilitation. He lost one eye. He cannot use his right arm because of paralysis. He had to use a wheelchair for a long time, and even today still needs a cane.

The Raos expected that their car insurance would pay for the high pile of medical bills they incurred while recovering from this terrible accident, not to mention the lost income from their family-owned business. But there was a problem. The Raos had car insurance, but the driver who caused the crash did not.  While the Raos had responsibly purchased $100,000 in liability coverage, that coverage was for others, not themselves. They did not know that for a very small addition to their premium they could have obtained as much coverage for themselves as they had purchased to protect others. What they had needed [SUM] coverage.

In other words, under the current law, policyholders will – often unwittingly – protect other motorists more than themselves.

The new law changes that, requiring the policyholder to consciously forego equal coverage. The “justification” for the new law, as stated in the sponsor’s memo, explains the basis for the change:

Few drivers are aware of the value of supplementary insurance and insurance companies rarely offer supplementary insurance coverage above the statutory minimum. This bill will ensure that drivers are fully protected themselves by supplementary insurance equal to the bodily injury liability insurance coverage they select to protect others, unless they affirmatively elect lower coverage for themselves.

This change is a positive one, but beware. If you enter into an insurance policy before June 18, 2018, or you renew that policy, the new law will not affect you and you will have to specifically request increased coverage.

If you or a loved one has suffered injuries due to being involved in a vehicle accident, contact our car accident lawyers today by calling the William Mattar (844) 444-4444 to schedule a free consultation or fill out a free initial consultation form—it’s easy and only takes a minute.



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