In a decision dated June 4, 2009, In the Matter of Allstate Insurance Company v. Rivera, the Court of Appeals handed down a ruling regarding SUM claims. Essentially the Court ruled that insurers under a SUM policy are “able to reduce the coverage limits of the tortfeasor’s policy only when payments made under the tortfeasor’s policy are to individuals — such as occupants of the tortfeasor’s vehicle, injured pedestrians or those operating a third vehicle– not covered under the SUM endorsement [to which they are making claims].” The court held that this guarantees that those who have purchased SUM coverage will receive the same recovery they have made available to third parties they injure–but no more.
Each co-occupant in the covered vehicles contended that he or she should have been allowed to deduct the payments made to other co-occupants, thereby reducing the tortfeasor’s bodily injury liability coverage to an amount less that the coverage limits on their vehicle, triggering the SUM coverage.
In Rivera, the claimants making SUM claims were covered by an Allstate auto policy issued to Petra Mercado that provided bodily injury liability and SUM coverage of $25,000 per person/$50,000 per accident. While the policy was in effect, the insured and 5 passengers were injured when struck by another vehicle which also had a 25/50 policy issued by GMAC. GMAC coughed up the $50k, paying $25k to the driver Mercado and $5k each to each of the 5 passengers. The five passengers then sought SUM benefits under the Allstate policy, which Allstate denied. Allstate claimed the SUM policy was not triggered since the $50k policy of the offending vehicle was an offset to their SUM coverage. The court of Appeals upheld the denial of coverage. For a copy of the decision see www.nycourts.gov/ctapps/decisions/2009/jun09/89&90opn09.pdf.