Underinsured Motorist Coverage in New York Car Accidents: What You Need to Know

Key Takeaways

• New York’s SUM endorsement combines uninsured- and underinsured-motorist protection, subject to its terms.
• The underinsurance trigger compares bodily injury liability limits, not simply your SUM limit against the other driver’s limit.
• Triggering coverage and calculating a payable SUM benefit are separate steps.
• Written notice is required as soon as practicable; there is no general 90-day safe waiting period.
• Do not sign a liability release before the SUM consent or release-or-advance requirements have been reviewed.

What is SUM coverage?

Supplementary uninsured/underinsured motorist coverage can protect an insured injured by a motorist with no applicable insurance or insufficient liability coverage. It is not a promise to pay every loss left after a crash.

Insurance Law § 3420(f) supplies the statutory framework. The prescribed endorsement defines insured persons, covered vehicles, exclusions, payment limits and claim conditions.

A declarations page is a starting point, not the whole contract. Compare the prescribed SUM endorsement with the endorsement and amendments in effect on the accident date.

Who must be offered matching limits?

For qualifying noncommercial policies originally entered into on or after June 16, 2018, § 3420(f)(2-a) generally provides matching SUM limits unless the first named insured signs a permitted waiver or selects lower limits.

Commercial policies and older policies renewed after the effective date are not covered by that same default rule. Check the policy’s history rather than assuming every current policy has identical requirements.

The state’s 2018 rulemaking notice explains that distinction. A coverage purchase or waiver should be evaluated from the actual declarations and signed records.

How does underinsured coverage trigger?

The key statutory comparison is between the insured policy’s bodily injury liability limits and the applicable bodily injury liability coverage of the other motor vehicle.

Do not substitute the SUM endorsement limit for the insured’s bodily injury liability limit at this step. That was the error identified in Farm Family v Gonzalez, 171 AD3d 1053 (2d Dept 2019).

The court found that SUM coverage was triggered but that the endorsement’s offsets left no benefit payable. A correct trigger analysis therefore does not establish the amount owed.

A liability insurer’s refusal to pay a disputed claim is also not automatically exhaustion of its policy. A genuine denial of coverage raises a different question under the endorsement’s uninsured-vehicle definition.

How are SUM benefits calculated?

Read the payment-limit and nonduplication provisions separately. Motor vehicle liability payments reduce the available SUM maximum under the endorsement; other compensation may raise additional nonduplication questions.

The firm’s 2016 Sherlock case history explains this using the actual Oyster Bay case: a $250,000 SUM limit, a $50,000 motorist settlement and a separate $425,000 municipal settlement.

The Second Department allowed arbitration to proceed because damages had not yet been determined. It did not award the $200,000 maximum potential SUM payment or remove the policy limit.

This is why damages, available coverage and total settlements belong in separate parts of a case valuation. Combining them into one “coverage gap” number can conceal the controlling offset.

Written notice: do not rely on a 90-day rule

The prescribed SUM endorsement requires written notice of claim as soon as practicable. The Department of Financial Services’ discussion of notice and arbitration reproduces that requirement.

There is no general rule allowing every insured to wait 90 days after recognizing a possible SUM claim. The facts bearing on timely notice and the applicable endorsement need prompt review.

Notice of a SUM claim is distinct from submitting a no-fault medical claim. The historical Presbyterian NF-5 decision concerns no-fault accident notice and proof of claim, not the SUM notice standard.

Keep dated copies of notices, delivery records, coverage requests and responses. Do not wait for the liability case to finish before investigating possible SUM coverage.

Settlement consent and the release-or-advance procedure

The time allowed for a carrier to respond to a proposed policy-limits settlement is a different issue from initial claim notice.

In Central Mutual v Bemiss, 12 NY3d 648 (2009), the Court of Appeals explained the 30-day written-notice mechanism for a qualifying policy-limits settlement and the insurer’s opportunity to advance the settlement amount.

The insured complied for one tortfeasor but settled with another for less than policy limits without the necessary consent, impairing subrogation rights. The court upheld the loss of SUM benefits.

The case also distinguishes exhaustion of the limits applicable to one tortfeasor from exhaustion of every potential tortfeasor’s policy. Exhaustion does not cancel the separate consent and subrogation obligations.

Have counsel review the proposed settlement, release, actual endorsement and receipt of notice before signing. The procedure is not a blanket instruction to send a letter, wait 30 days and release every defendant.

Arbitration is not the only possible procedural step

The prescribed arbitration clause generally gives the insured an option to demand arbitration of covered disagreements. At the statutory-minimum coverage level, either side may demand it under the clause.

The DFS opinion explains that distinction. Courts may also decide coverage or stay questions, as Sherlock demonstrates. Saying every SUM dispute must bypass court oversimplifies the process.

Do not confuse a SUM arbitration with every other use of “new arbitration.” The firm’s Medco Tech note concerns a no-fault equipment award and a different record-specific dispute.

What to bring for a coverage review

Gather these documents before evaluating a proposed settlement:

• All potentially applicable declarations, endorsements and coverage waivers.
• The other driver’s coverage disclosures and settlement offer.
• Notices to each insurer and proof of delivery.
• Proposed releases, consents and any advance offer.
• Medical records, wage-loss proof and payments from other sources.

Non-economic loss from a New York accident remains subject to the endorsement’s serious-injury exclusion and applicable law. SUM is not a second payment for basic economic loss already payable under no-fault.

For a Long Island car-accident case review, the policy and record should drive the analysis. Request a Free Case Review before releasing a party if SUM rights may be involved.

Last reviewed: September 2026 — editorial check of the cited statute, regulations and decisions. This overview is not a coverage determination or individualized deadline calculation.