You never thought you’d be in a car accident. But if you think being hit by another driver was a surprise, wait until you find out they didn’t carry enough liability insurance to pay for your injuries and damages.
That’s where Supplemental Uninsured/Underinsured Motorist (SUM) Coverage comes in. SUM coverage is designed for this type of situation by protecting you from someone who is underinsured or uninsured regarding your injuries and damages.
What is SUM Insurance?
SUM coverage is an additional layer of protection in your automobile insurance policy. It’s designed to protect drivers when the party at fault for the accident is uninsured or underinsured. An at-fault driver is underinsured if they don’t have enough liability insurance to pay for the injuries and damages they’ve caused you. In contrast, at-fault drivers are uninsured if they carry no valid automobile insurance.
When either situation occurs, SUM coverage steps in. Think of SUM insurance for insurance when the at-fault driver’s liability coverage isn’t enough to protect you.
Do I Need SUM Insurance?
Without the right coverage to pay for your injuries and losses, you could find yourself on the hook for medical bills, lost wages, or other expenses caused by the car accident. SUM coverage ensures you’re not paying the bill for someone else’s mistake.
Let’s say you’re hit by a negligent driver who has $25,000 in liability coverage, but your personal injuries, medical bills, and lost wages are well over $100,000. If you don’t have SUM coverage, you’re likely capped at recovering any more than $25,000 from the at-fault driver. However, if you carried SUM coverage limits of, let’s say, $100,000, you would be able to recover the full $25,000 from the at-fault driver’s policy, and then look to your SUM coverage for another $75,000 (for a total of $100,000).
How is SUM Insurance Different from Liability Insurance?
At first glance, SUM insurance seems like it’s the same thing as regular liability insurance. While they seem similar, they are actually quite different in who they provide compensation to.
Liability insurance is the mandatory insurance coverage that a driver has that pays another person if the driver causes injuries and other damages. If the driver was negligent, their liability insurance would pay for the damages caused as a result of their negligence. If you’re held accountable for an accident, your liability insurance is what covers the other party's expenses.
On the other hand, SUM coverage comes into play when you are on the receiving end of another driver’s negligence and your injuries and damages exceed the value of their liability insurance. It protects you from out-of-pocket expenses when the at-fault driver either doesn’t have enough insurance or any insurance at all.
You can’t control how much liability insurance a negligent driver has. You can, however, protect yourself by carrying additional SUM insurance that provides coverage above and up to an amount you know ahead of time.
How Does SUM Coverage Work?
Understanding how SUM coverage works can prepare you ahead of time by securing the coverage you would need after a bad accident. SUM coverage comes up in some very specific circumstances:
If you’re in an accident with an uninsured driver, the uninsured motorist aspect of SUM coverage definitely applies. The SUM portion of your policy would act to cover you.
If you’re in an accident with a driver that doesn’t have enough liability insurance, your SUM coverage would provide an additional lawyer of coverage to pay for your injuries and damages above and beyond that amount. As outlined in the example above, if the at-fault driver had liability limits of $25,000 and you had SUM coverage of $100,000, you would be able to pursue the $25,000 in coverage and thereafter another $75,000 (for a total of $100,000).
If you’re involved in a hit-and-run accident, your SUM policy steps in where the other driver’s liability insurance policy. Your SUM policy can step in to cover your damages and injuries, providing compensation when there’s no other insurer to claim from.
What are the Requirements to Pursue a SUM Claim?
In order to fully pursue a SUM claim against the insurance company, you must make sure to comply with a number of requirements common to all policies:
- Notification: You must provide written notice of intent to pursue benefits to your SUM insurer to let them know you may be pursuing benefits under the policy. Failing to do so in a timely manner could lead them to a denial of coverage.
- Exhaustion of Liability Policy: You must fully exhaust the at-fault driver’s liability insurance coverage in order to “trigger” the ability to pursue SUM benefits.
- Obtain Written Authorization to Settle: You must obtain written authorization to settle the underlying bodily injury case against the at-fault driver. Do not execute any settlement documents to resolve the case against the at-fault driver until you have written authorization from the SUM insurer. Settling the case against the at-fault driver without first getting written authorization from the SUM carrier can completely relieve the SUM carrier from having to pay you anything.
How Much SUM Insurance Do I Need?
SUM coverage isn't a one-size-fits-all package, you can mix and match to suit. Importantly, your SUM coverage must match the bodily injury coverage of your primary liability insurance. This means if you have $50,000 in bodily injury coverage, your SUM protection should also reflect that exact amount.
This flexibility allows you to increase your SUM coverage with ease—just clear it with your insurance provider. And if you’re feeling especially confident or tight on budget, you can opt out entirely by signing a waiver. Still, even if you choose to keep the minimum level, having SUM coverage can offer you much-needed protection against financial distress.
Do I Need SUM Coverage If I Have No-Fault Insurance?
Many injured accident victims wonder why No-Fault insurance doesn’t cover everything after an accident, and why you would ever even need SUM insurance to begin with.
No-Fault and SUM insurance cover different types of losses. No-Fault insurance covers medical bills, lost wages, and other reasonable and necessary expenses up to a certain amount. We have a great primer on what No-Fault insurance covers in a No-Fault state like New York. On the other hand, SUM coverage, while it can cover medical expenses and lost wages at a certain point, also allows payment for pain and suffering and future economic expenses.
Conclusion
In conclusion, while some options and coverage aspects like SUM might seem optional or perhaps a luxury, the reality is they provide an important layer of protection for you or a loved one. With one simple call, you can be speaking with an experienced attorney at Horn Wright, LLP, about your case. Make that call today.