The Truth About S.U.M. Coverage

How much S.U.M. coverage have you purchased for your automobile?  Most people have no idea.  In fact, most folks don’t know what S.U.M. coverage is.

S.U.M. stands for Supplemental Underinsured/Uninsured Motorists Coverage.  Start the thinking process this way:  liability insurance pays for damage you do to everyone outside your car; S.U.M. coverage covers you.

In New York State, S.U.M. coverage is mandatory.  If we drive a car, we are supposed to have it insured and we are required to have S.U.M. coverage.  Unfortunately, we are only required to have the minimum amount of coverage, currently $25,000.  So far, no problem, right?  Wrong – and this is why:

All drivers in New York State are also only required to have $25,000 in liability coverage.  In my experience, the worst drivers have the least amount of coverage.  The person, who’s had car accidents in the past, has to pay more money for coverage, ends up with the minimum amount.  Or even worse, decides to drive with no insurance at all.

Even if they have $25,000 in insurance coverage, that’s simply not a lot of money. According to the Foundation for Taxpayer and ConS.U.M.er Rights (FTCR), the average cost for hospital room and board during 2011 was between $3,180 to $7,648 a day.

Consider an automobile collision where “Mr. Driving While Texting” runs a red light and smashes into your car, causing you to suffer a crushed leg, several broken ribs, a collapsed lung, and a concussion.  Assume that same driver had purchased the $25,000 statutory minimum insurance with respect to liability insurance coverage.  A jury finds the inattentive driver caused the collision and returns a verdict for $100,000 to compensate you for your injuries.  The insurance company pays you the $25,000, but what about the other $75,000 you’re due?

Unless the inattentive driver has the money or means to pay, the inattentive driver will be known as “judgment-proof” and you will have little recourse to collect the other $75,000 owed to you.

This is where Supplementary Underinsured Motorist (S.U.M.) coverage comes in to play.  In the event the inattentive motorist’s coverage is not sufficient to cover your losses, your own S.U.M. coverage covers the difference, up to the policy limits of the S.U.M. coverage.

So, in our hypothetical, assume you had $250,000 in S.U.M. coverage.  You now may recover the $75,000 shortfall from the original $100,000 judgment from your own S.U.M. coverage.

Check your policy, call your agent, or the 800 number of your automobile insurance company.  Ask how much S.U.M. coverage do I have and then ask for more.  $500,000 worth of S.U.M. coverage will cost you somewhere between $120 and $140 per year.  Well worth the peace of mind.

That’s the truth about S.U.M. coverage.

Janet Izzo is an attorney with the firm.  Contact us at re.lahm@verizon.net .