What is an Uninsured Motorist Automobile Insurance Policy?
Perhaps the most important part of your Automobile Insurance policy is called U.M.-Uninsured Motorist. That means that if you are involved in an accident and the other car flees the scene or is uninsured, payment for your pain and suffering will come from your own insurance policy under the U.M. (uninsured motorist) endorsement. Under New York State Law, every insurance policy must include U.M. coverage just as it includes No-Fault coverage. The statutory amount of coverage is $25,000/$50,000. That is, the maximum amount the insurance company will pay to one person is $25,000 and $50,000 to 2 or more claimants. These maximums are paid regardless of how seriously a person is injured or how much liability insurance coverage he has. So, if a person has an insurance policy with liability limits of $100,000 /$300,000, his U.M. coverage is only $25,000/$50,000. Under Regulation 35D the law was changed and any person can raise his U.M. limits to the same amount of his Bodily Injury Limits. Therefore, if a person has Bodily Injury Limits of $100,000/$300,000 he can raise his U.M. limits to $100,000/$300,000. Once you purchase extra U.M., it is called S.U.M.-Supplemental Uninsured Motorist coverage. Thus, if a person has an accident with a hit and run driver or an uninsured vehicle, he can collect up to $100,000/$300,000 from his own S.U.M. policy endorsement.
The most interesting part of S.U.M. coverage is that it also includes U.I.M. coverage. That is, Under Insurance Coverage. So if a person has an accident and the other car is insured but only for $25,000/$50,000 and his injuries are worth much more, then the claimant collects $25,000 from the responsible person and then can make an S.U.M./U.I.M. claim for additional $75,000 (since there is a set off of the first $25,000).
In order to trigger U.I.M. coverage, your Bodily Injury limits must be higher than the tortfeasors’ coverage and you must get his full $25,000 policy. There are many intricate rules regarding S.U.M. /U.I.M. coverage. The beauty of S.U.M. /U.I.M. coverage is that it is relatively inexpensive. An S.U.M./UIM/ endorsement may cost only $35.00 to $40.00 per year.
A claimant for S.U.M. /U.I.M. benefits must not settle the underlying case before getting permission to settle from the S.U.M. /U.I.M. Insurance Carrier. This permission to settle cannot reasonably be withheld. If you cannot come to an agreement with the S.U.M/U.I.M. carrier as to the value of your injuries, you then proceed to arbitration where the arbitrator will decide the value of your claim.
In our office, we have had many cases where people sustained serious injuries and the “other” car had only a $25,000/$50,000 policy. For those clients who had S.U.M. coverage, we were able to collect much, much more than the $25,000. We always advise our clients to purchase S.U.M. coverage and we strongly advise you, the reader, to purchase S.U.M. coverage for all your vehicles.