Are You Aware of SUM Insurance Coverage?

Auto accident with damaged car flipped over onto the roof with airbag deployed

Have you ever heard of Supplemental Underinsurance Motorist coverage?

Probably not. It’s a well-kept secret but it can really make a difference if you’re ever hurt in a car accident.

Here’s a situation that I unfortunately see all too often.

Imagine that you’ve been injured in a car accident. It was the other driver’s fault. The injuries are serious. You miss time from work. Maybe you even need surgery. Your life is flipped upside down for months or even years. You may have lingering problems for the rest of your life.

Under these circumstances you’d be entitled to a financial award for what’s happened to you. If you’re lucky, the other driver has sufficient insurance coverage to adequately compensate you for all that you’ve been through. But what happens if he doesn’t?

The minimum amount of insurance a person can purchase in New York State is $25,000. What if the other driver has one of those minimum policies? That means the most you could ever hope to collect is $25,000. Minus attorney fees. That doesn’t even come close to compensating you for everything you’ve been through.

So, there you are with a case worth $100,000 or $200,000 or $500,000 or $1,000,000 or even more. And all you get is $25,000. It’s heartbreaking.

And I see it happen all the time.

Here’s another scenario.

The car that hits you was stolen. In that case there wouldn’t be any insurance coverage available from that vehicle at all.

Or how about this one.

The car that hits you flees the scene before you can get any insurance or identifying information from the other driver. The dreaded hit and run. Again, no insurance available from that vehicle because you don’t know who the driver or insurance company is.

Or this one.

The person driving the other vehicle “accidentally” allowed their car insurance to lapse by “forgetting” to pay for it.

I see this happen all the time too.

Is there anything you can do to protect yourself in any of these four very common scenarios?

Well, it’s a good news/bad news thing. The good news is yes, you can absolutely protect yourself. The bad news is that hardly anybody knows about it and very few people have the protection in place.

Supplemental Underinsurance Motorist coverage, commonly referred to as SUM is what you need. This is coverage you purchase on your own insurance policy when you buy your regular car insurance.

Consider the first scenario above. If you don’t have SUM coverage you are limited to recovering $25,000 for your injuries. However, for example, if you’ve purchased SUM coverage in the amount of $100,000, you are then are eligible to collect up to $100,000, the original $25,000 from the other insurance company and then up to a total of $100,000 from your own carrier. If you purchased $500,000 of Sum coverage you are eligible to collect up to $500,000 for your injuries, and so on.

It’s a great way to make sure you are fully compensated if you’re ever hurt in an accident.

However, very few people know about this. It’s not something commonly advertised or marketed by the insurance companies themselves so you wouldn’t know about it if you’re buying insurance online or directly from the company. If you go through an insurance agent, oftentimes they don’t tell you about the SUM option.

And here’s the crazy thing. SUM coverage is really inexpensive. A significant amount of SUM protection can be purchased for just a few dollars a month. Well worth it.

Scenarios 2, 3, and 4 above can also be avoided by purchasing this insurance. In the case of a stolen car, hit and run, or lapsed coverage you will be covered in the same way as scenario 1 although it will be referred to differently, as Uninsurance Motorist coverage, or UM coverage. It will insure you in cases where the other vehicle has no valid insurance at all and works exactly the same way as SUM coverage.

And here’s more good news. The UM coverage will be part of your SUM coverage. In other words, you will get both coverages together for the same price.

So, the next time you renew your car insurance take a minute to look at your SUM/UM options. Or speak directly to your insurance agent about it. You’ll be glad you did.