SUM/UM Demand Letter - New York

SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORIST (SUM/UM) DEMAND LETTER

State of New York

[LAW FIRM LETTERHEAD]

SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
ADMISSIBILITY GOVERNED BY N.Y. CPLR § 4547 AND, IF APPLICABLE, FED. R. EVID. 408

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [________________________________]

Date: [__/__/____]

[INSURANCE COMPANY FULL LEGAL NAME]
SUM/UM Claims Department
[________________________________]
[________________________________]
[City], [State] [Zip]

Attention: [________________________________], [Title]
Re: FORMAL SUM/UM POLICY LIMITS DEMAND — NEW YORK LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
SUM/UM Policy Limits: $[________________________________]
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Liability Limits: $[________________________________]
Demand Expiration: [__/__/____] at 5:00 p.m. Eastern Time

Dear [________________________________]:

I. INTRODUCTION AND FORMAL DEMAND

This firm represents [________________________________] ("our client" or "the insured") in connection with a claim for Supplementary Uninsured/Underinsured Motorist ("SUM") benefits — or, where applicable, Uninsured Motorist ("UM") benefits — arising under New York Insurance Law and the policy issued by [________________________________] (the "Company" or "[short carrier name]"). This letter constitutes a formal, pre-arbitration demand for payment of the full SUM/UM policy limits of $[________________________________].

New York uses the term "SUM" — Supplementary Uninsured/Underinsured Motorists — rather than the "UIM" designation used in many other states. SUM coverage is governed by N.Y. Ins. Law § 3420(f)(2) and the mandatory SUM endorsement prescribed by 11 NYCRR Part 60-2. It is a first-party benefit owed by [short carrier name] to its own insured.

Our client's damages, detailed below, far exceed both the tortfeasor's available liability coverage and the SUM limits of this policy. This is a clear policy-limits SUM case under New York law.

II. NEW YORK SUM/UM LAW — APPLICABLE FRAMEWORK

A. Statutory and Regulatory Authority

New York's SUM coverage scheme is among the most structured in the nation, governed by a combination of statute and regulation:

B. How SUM Works in New York — The Offset/Gap Model

Unlike "add-on" UIM in some states, New York SUM operates on a gap/offset model:

• SUM coverage is triggered when the tortfeasor's bodily injury liability limits are less than the insured's own SUM limits
• The prescribed endorsement generally reduces the maximum SUM payment by bodily-injury liability payments received from or on behalf of legally liable persons
• Example: Insured has $100,000 SUM; tortfeasor has $25,000 liability limits → maximum SUM benefit = $75,000 (the gap)
• The prescribed endorsement generally requires exhaustion of applicable bodily-injury liability limits by payment of judgments or settlements before SUM payment (N.Y. Ins. Law § 3420(f)(2); 11 NYCRR § 60-2.3(f), Condition 8)

C. Multiple Policies, Priority, and Non-Stacking Terms

Do not assume either universal stacking or universal anti-stacking. The prescribed endorsement contains maximum-payment, priority-of-coverage, and non-duplication provisions, and recovery may depend on whether the insured occupied a covered vehicle, the policies and limits available, and payments already received. Review 11 NYCRR § 60-2.3(f), the actual endorsements, and the priority rules before stating an aggregate or single-policy maximum.

D. Serious Injury Threshold (N.Y. Ins. Law § 5102(d))

Our client's SUM claim arises in the context of New York's no-fault/serious injury system. Under N.Y. Ins. Law § 5104(a), recovery of non-economic damages in a covered-person action requires proof of "serious injury" as defined in § 5102(d). Part EE of Chapter 58 of the Laws of 2026 applies to actions and proceedings commenced on or after May 26, 2026, regardless of when the accident occurred. For those actions and proceedings, serious injury includes any one of:

☐ Death
☐ Dismemberment
☐ Significant disfigurement
☐ A fracture
☐ Loss of a fetus
☐ Permanent loss of use of a body organ, member, function, or system
☐ Permanent consequential limitation of use of a body organ or member
☐ Significant limitation of use of a body function or system

Our client meets the serious injury threshold as follows: [________________________________]

For actions and proceedings commenced on or after May 26, 2026, Insurance Law § 5104(d) separately caps non-economic damages at $100,000 only for the statute's specified at-fault uninsured, impaired, or felony operators; the cap does not apply to an action for wrongful death. Confirm the claimant's status before applying or rejecting that cap.

E. No-Fault (PIP) Interaction

New York's no-fault system (N.Y. Ins. Law Art. 51) defines Basic Economic Loss (BEL) up to $50,000 per person, including qualifying medical expenses, lost earnings up to $2,000/month for up to three years, and other reasonable and necessary expenses up to $25/day for one year. Section 3420(f)(1) bars duplication of basic economic loss but provides that first-party benefits do not diminish UM obligations for non-economic loss and economic loss exceeding BEL. Calculate each category without double recovery.

III. COVERAGE ANALYSIS

A. Policy Information

B. Coverage Trigger

☐ UNINSURED MOTORIST (UM) CLAIM — The tortfeasor qualifies as an "uninsured motor vehicle" under 11 NYCRR § 60-2.1 and N.Y. Ins. Law § 3420(f)(1) because:

☐ The tortfeasor carried no bodily injury liability insurance at the time of the collision
☐ The tortfeasor's insurer disclaimed coverage and such disclaimer was timely under N.Y. Ins. Law § 3420(d)(2)
☐ The tortfeasor's insurer is insolvent and the applicable UM endorsement or statutory recovery mechanism responds
☐ This was a qualifying hit-and-run collision; physical contact occurred, the accident was reported within 24 hours or as soon as reasonably possible, and the sworn insurer notice required by the endorsement was timely provided

☐ SUM (UNDERINSURED MOTORIST) CLAIM — The tortfeasor qualifies as an "underinsured motor vehicle" because:

☐ The tortfeasor's bodily injury liability limits of $[________________________________] are less than the insured's SUM limits of $[________________________________]
☐ The insured has exhausted (or will exhaust prior to SUM payment) the tortfeasor's bodily injury liability coverage by payment of judgment or settlement
☐ Our client's damages exceed the combined available coverage

IV. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [____] [AM/PM], our client was [________________________________] at or near [________________________________], [City], New York [County: [________________________________] County].

[DETAILED NARRATIVE OF COLLISION — include road conditions, weather, traffic signals, direction of travel, point of impact, and immediate aftermath]

B. Tortfeasor's Negligence Under New York Law

The tortfeasor, [________________________________], was negligent under New York Vehicle and Traffic Law and common law in the following respects:

☐ Failure to exercise due care to avoid colliding with a pedestrian, bicyclist, or domestic animal (N.Y. VTL § 1146)
☐ Failure to yield right-of-way (N.Y. VTL §§ 1140–1142)
☐ Following too closely (N.Y. VTL § 1129)
☐ Excessive speed for conditions (N.Y. VTL § 1180)
☐ Distracted driving — handheld device (N.Y. VTL § 1225-d)
☐ Disobeying a traffic-control device or traffic signal (N.Y. VTL §§ 1110–1111)
☐ Improper lane change (N.Y. VTL § 1128)
☐ Driving under the influence (N.Y. VTL § 1192)
☐ Failure to signal (N.Y. VTL § 1163)
☐ [________________________________]

C. Evidence of Liability

1. Police/Accident Report
[________________________________] Police Department / NYPD / State Police
Report No.: [________________________________] / MV-104 Report

2. Witness Statements
[____] independent witnesses observed the collision; statements attached.

3. Physical/Forensic Evidence
Point of impact, vehicle damage patterns, skid marks, debris field, and event data recorder (EDR/black box) data.

4. Video/Photographic Evidence
☐ Traffic camera footage ☐ Dashcam footage ☐ Security/surveillance footage ☐ Scene photographs

5. Expert Analysis
[________________________________] (accident reconstructionist/biomechanical engineer) has concluded: [________________________________]

D. Comparative Fault Analysis

New York generally follows a pure comparative-fault rule under CPLR § 1411(a). For actions and proceedings commenced on or after May 26, 2026, however, § 1411(b) bars recovery in a personal-injury action subject to Insurance Law Article 51 when the claimant's culpable conduct is greater than that of the defendant or the combined culpable conduct of the defendants. Counsel must determine whether and how subsection (b) applies in this SUM/UM arbitration or related proceeding; use the commencement date, not merely the accident date. Our client's comparative fault is [____]% for the following reasons: [________________________________].

V. OUR CLIENT'S INJURIES, TREATMENT, AND SERIOUS INJURY QUALIFICATION

A. Injury Summary

As a direct and proximate result of this collision, our client sustained the following injuries, which constitute "serious injury" as defined by N.Y. Ins. Law § 5102(d):

Primary Injuries:

• [________________________________]
• [________________________________]
• [________________________________]

Serious Injury Category Met: [________________________________] (cite specific § 5102(d) category)

B. No-Fault (PIP) Coverage Status

Our client received/is receiving no-fault benefits under the applicable no-fault policy. No-fault benefits paid to date: $[________________________________]. Identify basic economic loss separately from non-economic loss and economic loss exceeding BEL; the UM/SUM recovery may not duplicate BEL.

C. Treatment Timeline

D. Current Condition and Prognosis

[DESCRIBE CURRENT CONDITION, ONGOING LIMITATIONS, PROGNOSIS, AND ANTICIPATED FUTURE TREATMENT]

E. Permanent Impairment

Basis: [________________________________] (evaluating physician/IME report, date [__/__/____])

VI. DAMAGES

A. Medical Expenses

Past Medical Expenses (Bills Incurred):

Future Medical Expenses (Present Value):

B. Lost Earnings

Past Lost Earnings:

Note: First-party benefits reimburse 80% of qualifying lost earnings, subject to the $2,000 monthly and three-year limits and statutory offsets. Any claimed excess economic loss must be proven, nonduplicative, and legally recoverable from the tortfeasor.

Future Lost Earning Capacity (Present Value):

Basis: [________________________________] (vocational/economic expert report, date [__/__/____])
$[________________________________] (present value)

C. Non-Economic Damages (Pain, Suffering, and Loss of Enjoyment)

Our client is entitled to non-economic damages because the serious injury threshold of N.Y. Ins. Law § 5102(d) has been satisfied. These damages include:

• Past pain and suffering: [DESCRIBE NATURE, INTENSITY, AND DURATION]
• Future pain and suffering: [DESCRIBE PERMANENCY AND IMPACT]
• Loss of enjoyment of life: [DESCRIBE SPECIFIC ACTIVITIES LOST]
• Loss of consortium (if applicable): [________________________________]

Non-Economic Damages Valuation: $[________________________________]

D. Damages Summary

VII. SETTLEMENT WITH TORTFEASOR AND EXHAUSTION OF TORTFEASOR'S COVERAGE

A. Status of Tortfeasor's Coverage

We [have reached / are in the process of reaching] a settlement with the tortfeasor's liability carrier, [________________________________], for the tortfeasor's policy limits of $[________________________________].

Under Condition 8 of the prescribed SUM endorsement, 11 NYCRR § 60-2.3(f), exhaustion of applicable bodily-injury liability limits by payment of judgments or settlements is generally a condition precedent to SUM payment. We hereby provide notice that the applicable coverage is being/has been exhausted.

B. Consent to Settle / Preservation of Subrogation Rights

IMPORTANT — CONSENT TO SETTLE REQUIRED:

Under Condition 10 of the prescribed SUM endorsement, 11 NYCRR § 60-2.3(f), [short carrier name] has consent and subrogation rights. This is actual written notice that [tortfeasor's carrier] has offered its available limit of $[________________________________] in exchange for a release.

Unless [short carrier name] agrees within 30 calendar days after receipt of this actual written notice to advance that settlement amount in exchange for our client's cooperation in its subrogation action, our client may execute the release permitted by Condition 10. Any other settlement that may impair subrogation requires written consent. See Matter of Central Mutual Insurance Co. (Bemiss), 12 N.Y.3d 648, 912 N.E.2d 54 (2009).

VIII. SUM BENEFITS CALCULATION

A. SUM Benefit Due Under New York's Gap/Offset Formula

We hereby demand payment of the full SUM policy limits of $[________________________________].

Our client's compensable damages of $[________________________________] vastly exceed the sum of the tortfeasor's liability limits and the SUM limits available. This is a policy-limits SUM case.

IX. COVERAGE-POSITION AND NOTICE REQUEST

A. Written Coverage Position

Please identify in writing each policy, endorsement, condition, exclusion, notice defense, offset, and factual basis on which [short carrier name] relies. The SUM endorsement's own notice, consent, exhaustion, and subrogation provisions govern this first-party claim.

N.Y. Ins. Law § 3420(d)(2) addresses disclaimers under liability policies for death or bodily injury arising from accidents in New York. Do not assume its liability-policy timing and waiver doctrine automatically governs every first-party SUM defense. Timeliness instead must be evaluated under the correct endorsement, regulation, and case law, including the notice standard discussed in Metropolitan Property & Casualty Insurance Co. v. Mancuso, 93 N.Y.2d 487, 715 N.E.2d 107 (1999).

B. Notice Preservation

This letter supplements, and does not replace, every prior accident, UM/SUM, settlement-offer, and arbitration notice. Counsel should calendar the endorsement's notice requirements and the six-year contract limitations period. See CPLR § 213(2); Matter of De Luca (MVAIC), 17 N.Y.2d 76 (1966). Section 3420(f)(2) also tolls the time to make a SUM claim while a tortfeasor's insurer fails to disclose its limits after a compliant written request.

X. BAD FAITH AND CONSEQUENTIAL DAMAGES WARNING

[short carrier name] owes our client — its own insured — a duty of good faith and fair dealing in the handling of this SUM claim. Under Bi-Economy Market, Inc. v. Harleysville Insurance Co., 10 N.Y.3d 187, 886 N.E.2d 127 (2008), and Panasia Estates, Inc. v. Hudson Insurance Co., 10 N.Y.3d 200 (2008), consequential contract damages may be available when the required foreseeability and causation are proven. Those property-policy decisions do not make extra-contractual damages automatic in a SUM dispute.

Punitive damages are available in extreme cases where the insurer's conduct is "so wanton as to imply a criminal indifference to civil obligations" and constitutes a pattern of misconduct directed at the public generally. Rocanova v. Equitable Life Assur. Socy., 83 N.Y.2d 603, 634 N.E.2d 940 (1994).

Potentially relevant claim-practice standards under N.Y. Ins. Law § 2601 and 11 NYCRR Part 216 include:

☐ Failure to acknowledge claim within 15 business days (11 NYCRR § 216.4)
☐ Failure to accept or deny claim within 15 business days after receipt of a properly executed proof of loss and all requested items (11 NYCRR § 216.6(c))
☐ Failure to provide a written denial identifying the specific policy provision and facts relied upon (11 NYCRR § 216.6(d))
☐ Unreasonably low settlement offer without basis
☐ Compelling litigation by offering substantially less than amounts ultimately recovered in actions brought by insureds (N.Y. Ins. Law § 2601(a)(4))
☐ Failure to send 90-day follow-up notices during an extended investigation (11 NYCRR § 216.6(c))

Note: N.Y. Ins. Law § 2601 does not create a private right of action — violations are enforceable by the New York Department of Financial Services (NYDFS) and are evidence of bad faith in a breach of contract claim.

XI. MANDATORY AAA SUM ARBITRATION — PROCESS AND NOTICE

A. SUM Arbitration Administration

The prescribed SUM endorsement provides for mandatory arbitration of disputes within its arbitration clause, and 11 NYCRR § 60-2.4 governs administration of SUM arbitrations through the organization designated by the Superintendent. The current AAA New York SUM/UM program accepts filings online or by mail. Confirm the governing endorsement and current program rules before filing; a self-insured vehicle or a pure UM claim may present different authority or procedures.

AAA New York State Insurance Arbitration Tribunal
Website: adr.org/special-services/new-york-state-insurance/sum-um

B. Arbitration Demand Notice

If [short carrier name] fails to accept this demand within the response period, we will file a Demand for SUM Arbitration with the AAA. Consider this letter as formal notice of our intent to invoke arbitration pursuant to 11 NYCRR § 60-2.4 and the SUM endorsement.

XII. RESPONSE DEADLINE

THIS DEMAND EXPIRES AT 5:00 P.M. EASTERN TIME ON [__/__/____].

Consequences of Non-Response or Rejection

If [short carrier name] fails to accept this demand by the deadline:

1. A demand for AAA SUM arbitration will be filed to the extent the dispute falls within the governing endorsement's arbitration clause and 11 NYCRR § 60-2.4
2. Bad faith and consequential damages claims will be evaluated under Bi-Economy Market and Rocanova
3. A complaint will be submitted through the New York Department of Financial Services consumer complaint portal at dfs.ny.gov/complaint, or with assistance from the DFS consumer hotline at (800) 342-3736, alleging applicable violations of N.Y. Ins. Law § 2601 and 11 NYCRR Part 216
4. Motor Vehicle Accident Indemnification Corporation (MVAIC) claims (if applicable) will be pursued pursuant to N.Y. Ins. Law Art. 52

XIII. CONCLUSION

[short carrier name] has a legal and contractual obligation to pay SUM benefits to its own insured when, as here, the tortfeasor's coverage is insufficient to compensate our client's serious, permanent injuries. New York's SUM system was designed precisely for this situation. We urge [short carrier name] to resolve this matter promptly and fairly by tendering the full SUM policy limits.

Respectfully submitted,

[________________________________]

By: _______________________________
[________________________________], Esq.
NY Bar Registration No.: [________________________________]
[________________________________]
[________________________________], NY [____]
Tel: [________________________________]
Fax: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

• Copy of policy declarations page and SUM/UM endorsement
• Police/accident report (MV-104)
• Medical records and bills (itemized)
• No-fault (PIP) payment ledger
• Photographs of vehicles and scene
• Vocational/economic expert report (if applicable)
• Accident reconstruction report (if applicable)
• IME/independent medical evaluation reports

CC:

• [________________________________] (client)
• [________________________________] (tortfeasor's liability carrier — re: consent to settle)

SOURCES AND REFERENCES

• N.Y. Ins. Law § 3420(f): nysenate.gov/legislation/laws/ISC/3420
• N.Y. Ins. Law § 5102 (serious injury / basic economic loss): nysenate.gov/legislation/laws/ISC/5102
• N.Y. Ins. Law § 5104 (tort threshold and narrow damages cap): nysenate.gov/legislation/laws/ISC/5104
• N.Y. CPLR § 1411 (comparative fault): nysenate.gov/legislation/laws/CVP/1411
• N.Y. CPLR § 4547 (compromise evidence): nysenate.gov/legislation/laws/CVP/4547
• N.Y. Vehicle and Traffic Law: nysenate.gov/legislation/laws/VAT
• 11 NYCRR § 60-2.3 (prescribed SUM endorsement): govt.westlaw.com/nycrr/Document/I5008aab1cd1711dda432a117e6e0f345
• 11 NYCRR § 60-2.4 (SUM Arbitration): law.cornell.edu/regulations/new-york/11-NYCRR-60-2.4
• NYDFS Circular Letter No. 3 (2026) (Part EE applicability): dfs.ny.gov/industry-guidance/circular-letters/c32026-01
• AAA NY SUM/UM Arbitration Program: adr.org/special-services/new-york-state-insurance/sum-um
• N.Y. Ins. Law § 2601 (unfair claims practices): nysenate.gov/legislation/laws/ISC/2601
• 11 NYCRR Part 216 (Regulation 64): law.cornell.edu/regulations/new-york/title-11/chapter-IX/part-216
• Matter of Central Mutual Insurance Co. (Bemiss), 12 N.Y.3d 648, 912 N.E.2d 54 (2009)
• Metropolitan Property & Casualty Insurance Co. v. Mancuso, 93 N.Y.2d 487, 715 N.E.2d 107 (1999)
• Matter of De Luca (MVAIC), 17 N.Y.2d 76 (1966)
• Bi-Economy Market v. Harleysville, 10 N.Y.3d 187 (2008): caselaw.findlaw.com/court/ny-court-of-appeals/1014104.html
• Rocanova v. Equitable Life, 83 N.Y.2d 603 (1994): law.justia.com/cases/new-york/court-of-appeals/1994/83-n-y-2d-603-0.html
• NYDFS Consumer Complaint Portal: dfs.ny.gov/complaint
• CPLR § 213(2) (six-year limitation): nysenate.gov/legislation/laws/CVP/213
• MVAIC (Motor Vehicle Accident Indemnification Corporation): mvaic.com

This template was verified against New York law available on July 13, 2026. New York SUM law is highly technical and procedurally demanding. Consult a licensed New York attorney and verify all statutory citations, endorsement language, and AAA procedural rules before use.