Sec. 60-2.2. Notice about SUM coverage

(a)

(1) Every insurer writing motor vehicle liability insurance that satisfies the requirements of article 6 or 8 of the Vehicle and Traffic Law shall, with respect to all new and renewal policies, provide a written notice in concise language that shall include:

(i)

(a) except as provided in clause (b) of this subparagraph, a statement that SUM coverage is available, including the SUM limits being offered for purchase; or

(b) for the initial written notice, with regard to a motor vehicle liability insurance policy originally entered into on or after June 16, 2018 other than a commercial risk insurance policy:

(1) a statement that the insurer shall provide SUM limits in an amount equal to the bodily injury liability insurance limits of coverage provided under the motor vehicle liability policy unless a first named insured declines the SUM coverage or selects a lower amount of coverage through a written waiver signed by the first named insured, subject to the requirements of Insurance Law section 3420(f)(2-a)(B), provided, however, if the insurer requires that the SUM coverage limit be equal to the policy’s bodily injury liability insurance limit, then the written waiver shall only provide for the first named insured’s option to decline SUM coverage under the policy; and

(2) a statement that the first named insured’s signed, written waiver declining SUM coverage or selecting a lower amount of SUM coverage shall apply to all subsequent renewals of coverage and to all policies or endorsements that extend, change, supersede, or replace an existing policy issued to the first named insured, unless changed in writing by a first named insured;

(ii) the provisions set forth in section 60-2.1(a), (b) and (c) of this Subpart and an explanation of the difference between UM coverage and SUM coverage; and

(iii) the examples about SUM coverage set forth in subdivision (b) of this section.

(2)

(i) Every insurer writing motor vehicle liability insurance providing liability insurance coverage in satisfaction of the financial responsibility requirements of Vehicle and Traffic Law article 44-B shall, with respect to all new and renewal policies, or new endorsements providing such coverage added to an existing policy, provide a written notice in concise language that shall include:

(a) if the policy provides liability coverage as required by Vehicle and Traffic Law section 1693(3), a statement that SUM coverage is being provided while the driver provides a prearranged trip;

(b) if the policy provides liability coverage as required by Vehicle and Traffic Law section 1693(2):

(1) except as provided in subclause (2) of this clause, a statement that SUM coverage is available while the driver is logged onto a transportation network company’s digital network but is not engaged in a transportation network company prearranged trip, including the SUM limits being offered for purchase; or

(2) with respect to a policy originally entered into on or after June 16, 2018 other than a commercial risk insurance policy:

(i) for the initial written notice, a statement that the insurer shall provide SUM limits in an amount equal to the bodily injury liability insurance limits of coverage provided under the motor vehicle liability policy unless a first named insured declines the SUM coverage or selects a lower amount of coverage through a written waiver signed by the first named insured, subject to the requirements of Insurance Law section 3420(f)(2-a)(B), provided, however, if the insurer requires that the SUM coverage limit be equal to the policy’s bodily injury liability insurance limit, then the written waiver shall only provide for the first named insured’s option to decline SUM coverage under the policy; and

(ii) a statement that the first named insured’s signed, written waiver declining SUM coverage or selecting a lower amount of SUM coverage shall apply to all subsequent renewals of coverage and to all policies or endorsements that extend, change, supersede, or replace an existing policy issued to the first named insured, unless changed in writing by a first named insured;

(c) the provisions set forth in section 60-2.1(a), (b) and (c) of this Subpart and an explanation of the difference between UM coverage and SUM coverage; and

(d) the examples about SUM coverage set forth in subdivision (b) of this section.

(ii) With respect to a group policy issued in satisfaction of the financial responsibility requirements of Vehicle and Traffic Law article 44-B, the insurer shall provide the notice to the transportation network company. If the group policy is issued on an excess line basis, the excess line broker shall provide the notice at time of placement to the transportation network company. If an authorized insurer makes SUM coverage available optionally to the group members, then the insurer also shall provide the notice to the group members.

(b) The following examples, using per person limits unless otherwise noted, illustrate the proper application of SUM coverage:

(1) Example One:

Insured's Bodily Injury Damages	$300,000
Insured's Liability Limit	$500,000
Insured's SUM Limit	$250,000
Other Motor Vehicle Liability Limit	$25,000

Result:

In this example, the insured has purchased the maximum amount of SUM coverage that must be offered by the insurer, provided that the insured has purchased bodily injury liability limits of at least $250,000. Insured recovers $25,000 from the negligent owner or operator of the other motor vehicle, and $225,000 ($250,000 minus $25,000) under the SUM coverage, for a total recovery of $250,000.

In the event that the negligent owner or operator of the other motor vehicle had no liability insurance at all, the insured would collect $250,000 in SUM coverage from the insured's own insurer. However, if the owner or operator of the other motor vehicle was not negligent, then the insured would receive no SUM payments.

(2) Example Two:

Insured's Bodily Injury Damages	$100,000
Insured's Liability Limit	$25,000
Insured's SUM Limit	$25,000
Other Motor Vehicle Liability Limit	$25,000

Result:

Insured recovers $25,000 from the negligent owner or operator of the other motor vehicle. The insured receives nothing under the SUM coverage, which equals the mandatory UM coverage, since the liability limits on the other owner or operator’s motor vehicle were not lower than the liability insurance limits on the insured’s motor vehicle. If the insured’s liability and SUM limits were both $50,000, then the insured would collect another $25,000 in SUM coverage from the insured’s own insurer.

(3) Example Three:

Insured's Bodily Injury Damages	$60,000
Insured's Liability Limit	$100,000
Insured's SUM Limit	$100,000
Other Motor Vehicle Liability Limit	$50,000

Result:

Insured recovers $50,000 from the negligent owner or operator of the other motor vehicle and $10,000 under the SUM coverage, which is the difference between the amount of the insured’s SUM coverage and the liability coverage available from the other motor vehicle owner or operator, limited by the amount of the insured’s bodily injury damages.

(4) Example Four:

Insured's Bodily Injury Damages	$150,000
Insured's Liability Limit	$100,000
Insured's SUM Limit	$100,000
Other Motor Vehicle Liability Limit	$25,000

Result:

If the insured and the owner or operator of the other motor vehicle were each 50 percent at fault for the accident, then the insured’s total recovery would be $75,000, in light of comparative negligence of the parties involved in the accident. The insured would recover $25,000 from the negligent owner or operator of the other motor vehicle and $50,000 under the SUM coverage.

On the other hand, if the owner or operator of the other motor vehicle was totally at fault for the accident, then the insured would recover $25,000 from the negligent owner or operator and would then receive $75,000 in SUM coverage from the insured’s own insurer. Had the insured purchased liability and SUM limits of $150,000 or more, the SUM recovery would then be $125,000.

(5) Example Five:

Insured’s Bodily Injury Damages	$25,000
Passenger’s Bodily Injury Damages	$25,000
Another Passenger’s Damages that resulted in death	$50,000
Insured’s Combined Single Liability (CSL) Limit	$75,000
Insured’s CSL SUM Limit	$75,000
Other Motor Vehicle Liability Limit	Uninsured (i.e. no coverage)

Result:

Since the other motor vehicle was uninsured, the full $75,000 CSL SUM limit is available for all insured persons from this accident under the policy. However, since the accident involves insured persons who were both injured and killed, the mandatory UM limits of $25,000 per person and $50,000 per accident for injured persons and $50,000 per person and $100,000 per accident for persons killed in the accident are available. Therefore, the insured and first passenger each recover $25,000 and the second passenger’s estate recovers the full $50,000 under the SUM coverage.

If the insured’s CSL and CSL SUM limit were each $300,000 and the insured’s damages amounted to $200,000, then all insured persons would be covered under the SUM coverage as the total damages ($200,000 + $25,000 + $50,000 = $275,000) are less than the $300,000 CSL SUM limit.