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“SUM” is Better Than Nothing

March 2, 2012

Suffering a serious injury in an automobile accident can have a devastating impact on one’s physical and financial well-being. Typically, a lawsuit stemming from a motor vehicle accident is brought with the goal of obtaining just compensation for injuries suffered. But consider this common, and often surprising, scenario: You are seriously injured in an automobile accident as a result of someone else’s negligence and suffer injuries determined to be worth $100,000.00. You hire an attorney, file a lawsuit, and justifiably expect to be fairly compensated for your injuries only to find out the person responsible has a maximum bodily injury insurance coverage limit of $25,000,00. What are you options?

Your best option is to protect yourself ahead of time, and avoid problematic situations like the one posed above, with “SUM” coverage. SUM, which stands for supplementary uninsured/underinsured motorist coverage, is insurance that you can purchase from your own automobile insurance company, which typically costs just a few extra dollars a month. Essentially, SUM is designed to afford protection in the event that the person responsible for your injuries has insurance limits that are too low to adequately compensate you for the injuries sustained.

It is important to know that before a SUM coverage claim can be made, 3 requirements must be met:

  1. The injured party’s insurance coverage for bodily injury limits must exceed the bodily injury limits of the person responsible for your injuries;
  2. The injured party must “exhaust” the bodily injury limits of the responsible party by way of settlement or judgment;
  3. The injured party must secure the permission of the SUM insurance carrier prior to settling with the responsible party, and the injured party can do nothing to prejudice the SUM carrier’s subrogation rights.

Revisiting the scenario presented above, again suppose you were in an automobile accident and suffered injuries worth $100,000.00. The person responsible for your injuries has available insurance coverage totaling $25,000.00, only now you also have SUM coverage purchased from your insurer in the amount of $100,000.00. Without the SUM coverage, you could typically only recover a total of $25,000.00. With the SUM coverage, you could recover the $25,000.00 from the person responsible for your injuries, plus you can recover an additional $75,000.00 in SUM coverage from your own insurance company, thus fully compensating you for your injuries determined to be worth $100,000.00.

Unfortunately, many drivers are unfamiliar with SUM coverage and the importance of protecting oneself in the event of an accident. The simple example above illustrates how SUM coverage can provide an excellent opportunity for protecting one’s financial well-being in the event of a motor vehicle accident.