One of the more interesting, and significant, insurance law questions that has been posed to the courts in recent years involves the issue of whether an “SUM” carrier is entitled to an offset or reduction in coverage for the amount(s) received from non-motor vehicle tortfeasors, such as municipalities, bars, and/or medical providers, in addition to amounts received by the insured/claimant from the motor vehicle tortfeasor involved in the accident. Although the initial decisions on that issue were consistent in expansively reading the SUM endorsement to maximize the number of potential offsets or reductions in the SUM insurer’s policy limits (thereby minimizing the SUM coverage), a more recent decision by the Appellate Division, Second Department, in which that court, in a rare move, effectively overruled an earlier holding, has created a division of authority that leaves the question somewhat “unsettled.”
Pertinent Policy Provisions
The Supplementary Uninsured/Underinsured Motorists (SUM) Endorsement—New York1 prescribed by the Insurance Department in 1993 as part of Regulation 35-D,2 provides in its “Maximum SUM Payments” Condition (Condition 6), that “Regardless of the number of insureds, our maximum payment under this SUM endorsement shall be the difference between: (a) the SUM limits [stated in the Declarations] and (b) the motor vehicle bodily injury liability insurance or bond payments received by the insured or the insured’s legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured [emphasis added].”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
