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SUM-thing Might Be Changing in the New York State Insurance Law

October 22, 2012

During last summer’s legislative session the New York State Senate and Assembly passed a bill that will require insurance companies in to include supplementary underinsured/uninsured motorist coverage (SUM) in their policies at the same level as the insured’s own liability limits.  Although not signed into law by Gov. Cuomo yet, this is an important piece of consumer protection legislation for all insured automobile drivers to understand.

Currently, insurance laws in New York only require insurance policies to offer uninsured motorist (UM) coverage at the minimum limit of $25,000 per person/$50,000 per incident, but not SUM coverage.   Under our current system, SUM is an add-on protection that can be purchased, often for only a few extra dollars a month, to help cover an injured person’s damages if the motorist causing the accident has low liability limits.  Under the new law, insurance companies will be required to provide SUM coverage automatically in the new policies that they offer and policyholders can choose to opt-out if they do not want to pay the few extra dollars a month.

Before choosing to opt-out, remember what has been pointed out in earlier posts on our site.  Such small minimum policy limits required by current law, and a lack of SUM coverage, frequently leads to situations where the costs associated with injuries caused to those persons involved in a motor vehicle accident are greater than the offending drivers low policy limits.

This new law offers a common sense way to give consumers more choices and offer greater protection to New York drivers.  Under the new law, which will aim to increase the number of drivers in New York with SUM coverage, fewer persons affected by motor vehicle accident will have to turn to Medicaid or other public benefits if their injures are so great that they exhaust the low insurance limits of the offending vehicle.