New York does not require drivers to purchase supplemental underinsured motorist (SUM) coverage. However, many drivers still opt for a SUM policy as a safety precaution. Its important benefits can give the driver a chance to recover the full amount of damages in a crisis.

However, as with any policy, there are limits to what an insurer is liable to provide. Individual policies vary, but there are a few conflicts that are common to SUM claims.

#1: The policy holder does not have SUM coverage

An insurer is not liable to cover costs that are not in the claimant’s policy. In this case, the insurer may refer to the specific language of the claimant’s policy. Although the claimant may have SUM coverage, its amount might not exceed the compensation that the claimant already received from the other party. 

#2: The policy holder did not first seek appropriate compensation from the other party

SUM policies aim to complement damages from the other party – not replace them. If a policy holder turned to their own insurer before exploring their options with the other party, this may be a valid reason to deny their claim.

A claimant might also risk their coverage if they accept a settlement without their SUM insurer’s approval. A settlement may be significantly lower than the potential entitlement, which would unfairly place a heavier burden on the claimant’s insurer.

#3: The other party is sufficiently insured

Depending on the estimated damages of an accident, the other party’s policy might cover the amount in full. If so, the claimant cannot justify seeking additional compensation from his or her own insurer. However, such cases may involve disputes about the total amount of damages or disclosure issues.

SUM claims can be complex, and they may lead to litigation. Insurers need to examine the details of these cases carefully and prepare to justify their position in court as necessary.