Uninsured Motorist Claims (UM claims) refers to insurance you purchase as part of your automobile insurance coverage that will compensate you if a person that has no insurance injures you in an accident. Supplemental Underinsured Motorist Claims (SUM claims), refers to insurance coverage you purchase as part of your automobile insurance coverage that will compensate you if you’re injured in a motor vehicle accident by a person that does not have enough liability insurance coverage to adequately compensate you for your injuries.
The UM/SUM insurance you purchase as part of your automobile coverage will step in the place of the negligent party and compensate you for your losses. This insurance will only apply if the other party was negligent. If the accident was your fault you cannot make a UM/SUM claim. If you are partially at fault for your accident, you can make a claim and receive compensation for the other person’s proportionate share of fault regarding the accident.
There may be several instances where UM coverage will be triggered in order
to compensate you for injuries suffered in a car accident. Every person must maintain automobile liability insurance on their vehicles in the amount of at least $25,000. However, as we all know, not everyone follows the law and there are many instances where car accident victims suffer injuries caused by a person operating a vehicle without insurance.
In such a case, you can present a UM Claim to your insurance company for compensation for your injuries. Another instance where UM coverage applies is in a hit and run accident. If you are a passenger in someone’s car that does not have insurance you can make a UM claim against your own household vehicle. A UM claim should be made as soon as possible as certain deadlines will apply.
The insurance company will require proof that the offending driver was uninsured at the time of the accident or fled the scene of the accident prior to accepting the claim. In a hit and run situation proof of contact with another car will be required to pursue a UM claim. Once the proof is provided to the carrier, you can pursue recovery from your own carrier up to the limits of your UM coverage. In New York, everyone must have at least $25,000 of UM coverage. But most insurance companies offer policies up to $1,000,000 for an extra cost. However, it must be in place prior to your accident to apply.
You initiate your UM claim by providing written notice to your insurance carrier you were injured in an accident with an uninsured driver or a driver that fled the scene. The carrier will inform you if they are accepting the claim or require more proof before accepting the claim. Once the adequate proof has been received by the carrier, they will assign an adjuster to handle the claim. The adjuster will gather information such as a police accident report, witness statements, medical records and lost wage records. Once the adjuster has the relevant information they will evaluate the claim. If the adjuster feels that the other party is at fault or at least partially at fault and that you have sustained a serious injury, they will make an offer to settle. You can either accept the offer or demand more money. If you cannot agree upon an amount of money that is fair, you can request arbitration with the American Arbitration Association.
Litigating a UM claim against your own insurance carrier in an arbitration can be tricky. The process is similar to a trial. Prior to the arbitration, you must submit to discovery, a deposition and medical exam and provide medical records and other documentation to support your case. Once all of that is complete there will be a hearing before an arbitrator. The hearing will be similar to a mini-trial. There will be opening statements, testimony, presentation of evidence and closing statements.
I would strongly recommend hiring a qualified personal injury attorney to pursue a UM claim. The insurance companies have made filing for the claim very complicated and full of pitfalls. Further, litigating a case at arbitration takes years of training and experience. It can be done pro se, but is not advisable.
Pursuing an SUM claim is very similar to pursuing a UM claim with one
exception. Since a SUM claim is one you make when the offending party is underinsured, before pursuing the claim with your carrier, you must first resolve the underlying claim for the full limit of the offending party’s insurance. For example, if the person that caused your injury has only a $25,000 policy limit and your injuries exceed that amount, you must receive the full amount before you qualify to pursue your SUM claim. If you accept anything less than the full amount you will be barred from pursuing a SUM claim. You also should provide notice to your carrier as soon as possible that you are planning to pursue a SUM claim. Therefore, as soon as you learn that the limits of the offending vehicle are underinsured, you should let your carrier know that you will be pursing a SUM claim.
Further, you must provide your own carrier notice of your intent to settle your claim against the responsible party prior to accepting the settlement offer and obtain your carrier’s written consent to settle the claim. The purpose of this is so the carrier can investigate whether the responsible party may have additional insurance that may cover the claim. An insurance carrier cannot unreasonably withhold consent to settle. Once notice is provided to them of your intent to settle, they have thirty days to provide consent or come forward with their reasons for withholding their consent. If they do neither, you can settle your claim with the offending party and pursue your SUM claim.
Once again, I must caution that pursuing this type of claim is complicated and full of pitfalls. It is advisable that you consult with a personal injury attorney prior to pursuing an SUM claim.
Steven Palermo is the managing partner for Palermo Law, Long Island’s Personal Injury Law Firm. He has been helping people receive compensation for their injuries for over 21 years. He focuses on cases involving car accidents, truck accidents, construction accidents and slip and fall injuries.
His book The Ultimate Guide to Handling New York Car Accident Claims details the ins and outs of a car accident claim in a simple, easy-to-read manner.
You may be so severely injured in a car accident that the other driver’s Bodily Injury Liability does not fully cover the losses you’ve endured. This is a scenario that occurs often in New York, which is why it’s so important to understand “SUM” (Supplemental Uninsured/Underinsured Motorist) Coverage and how it can help you recover for your losses should this be your case.
By New York State Law, every driver must have a minimum $25,000 SUM policy. We believe everyone should purchase over the minimum. This policy protects you in case you are ever in a car accident with an underinsured driver – one whose Bodily Injury Liability does not fully cover your damages. However, your own policy must exceed that of the at-fault driver’s to receive these benefits. Every driver is also mandated to have No-Fault coverage, which you are entitled to no matter who is at-fault for your car accident. No-Fault will cover your medical bills and lost wages up to $50,000. But for severe injuries, that may not be enough. In a car accident case, your personal injury attorney will bring a claim against the at-fault driver and their insurer will be responsible for covering your damages (current/future medical bills, lost wages, pain and suffering). They will pay a percentage of your damages proportionate to the at-fault party’s percentage of liability in the accident.
However, in many severe cases, the at-fault driver’s insurance policy may not fully compensate for all of your losses. In this scenario, your personal injury attorney will make a claim against your own insurer to obtain any additional necessary compensation through your SUM policy.
If you choose to pay for the minimum SUM policy ($25,000 – the 25/50 policy), your SUM coverage will exhaust at $25,000 if you are the only individual in your car (or the only injured individual). If there is more than one injured individual in your car, though, coverage will exhaust at $50,000 (which is split amongst you and your passengers). However, this is only if you choose to pay the minimum 25/50 policy.
Insurance adjusters make commission based off of their salaries. Many may not mention how important it is to have a higher SUM policy than the minimum. They want to make their sale, and if they push you to purchase a higher SUM policy you may end up believing it will drastically increase your monthly premium. But if you calculate the annual add-on, it’s really not that bad, and it’s most definitely worth the extra protection. Remember, your liability policy should match your SUM policy and if you have the minimum (and so does the at-fault driver in your accident), you won’t be entitled to this protection. So, it’s in your best interest to consider purchasing a higher SUM policy.