What do the letters “S-U-M” mean and why is it so important concerning your auto insurance? Well, SUM stands for Supplementary Underinsured Motorist coverage. To drive in New York State one needs a minimum basic 25/50 policy for third party liability.
That means in any auto accident, if you are sued, you have $25,000 coverage available for any one person making a claim against you and $50,000 available to all parties making a claim against you (if there is more than one).
This is really an inadequate amount of liability coverage in today’s world. What happens if you are in an auto accident and the other party is at fault and they only have this minimum $25,000 available for your claim against them? Further, what if your medical bills and lost time far exceed $25,000 – not to mention your pain and suffering from your injuries?
Here is where SUM comes into play. If you yourself have a $300,000 liability policy, you can add to your coverage $300,000 SUM. What this means is that after you collect on your claim against the party at fault from his insurance company of the $25,000 limit, you can then seek damages with a claim against YOUR OWN COMPANY by filing an SUM claim. $275,000 would be available to you, the injured party ($300,000SUM coverage less the $25,000 collected from the party at fault).
There are some technicalities such as one must file the SUM claim within a reasonable time of discovering the other driver has coverage inadequate to “cover” your damages, and one must obtain your own company’s consent before accepting the policy limits of the faulting party’s coverage.
If you only have minimum SUM coverage, we advise it’s time you speak to your insurance broker about a change in coverage.