SUM/UM Demand Letter - New York

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

State of New York

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER N.Y. CPLR § 4547 AND F.R.E. 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
• SUM benefits are calculated as the insured's SUM limit minus the tortfeasor's applicable liability limit (not the amount actually recovered)
• Example: Insured has $100,000 SUM; tortfeasor has $25,000 liability limits → maximum SUM benefit = $75,000 (the gap)
• The insured must exhaust the tortfeasor's bodily injury liability coverage before SUM is available (N.Y. Ins. Law § 3420(f)(2); 11 NYCRR § 60-2.1)

C. Anti-Stacking Rule

New York enforces anti-stacking of SUM coverage. Where multiple vehicles are insured under the same policy or multiple policies issued by the same insurer, the insured may not stack SUM limits. The insured is entitled to the highest single SUM limit available, not the cumulative total. N.Y. Ins. Law § 3420(f)(1).

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 motor vehicle accident requires proof of "serious injury" as defined in § 5102(d). 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
☐ A medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment (the "90/180" category)

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

E. No-Fault (PIP) Interaction

New York's no-fault system (N.Y. Ins. Law Art. 51) provides Basic Economic Loss (BEL) coverage up to $50,000 per person, including medical expenses without time limitation, 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. SUM damages are considered in addition to, not duplicative of, no-fault benefits already paid.

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 (covered by New York MVAIC, N.Y. Ins. Law Art. 52)
☐ This was a qualifying hit-and-run collision; physical contact occurred and was reported to police within 24 hours per policy requirements
☐ The tortfeasor's coverage limits are below the mandatory New York minimums

☐ 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 maintain proper lookout (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)
☐ Running red light or stop sign (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

Under New York's pure comparative fault rule (CPLR § 1411), a plaintiff's recovery is reduced in proportion to his or her own negligence but is not barred. Our client's comparative fault in this collision is [____]% [zero/minimal] 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: $[________________________________]. These payments are not offset against SUM benefits but are noted for completeness.

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: No-fault reimburses lost earnings up to $2,000/month for up to 3 years. Amounts above that threshold and beyond 3 years are SUM-compensable.

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 $[________________________________].

Pursuant to 11 NYCRR § 60-2.1 and the mandatory SUM endorsement, exhaustion of the tortfeasor's bodily injury liability coverage is a condition precedent to payment of SUM benefits. We hereby provide notice that the tortfeasor's coverage is being/has been exhausted.

B. Consent to Settle / Preservation of Subrogation Rights

IMPORTANT — CONSENT TO SETTLE REQUIRED:

Pursuant to the SUM endorsement (11 NYCRR § 60-2.3(a)), [short carrier name] has a right to consent before our client settles with the tortfeasor's carrier. We hereby formally request written consent to settle with [tortfeasor's carrier] for $[________________________________].

Please provide written consent or your position within [____] days. Failure to respond within a reasonable time may be treated as consent. If [short carrier name] withholds consent and elects to pursue its own recovery from the tortfeasor, it must substitute payment of the tortfeasor's limits to our client.

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. DISCLAIMER / COVERAGE DEFENSE NOTICE

A. Timely Disclaimer Obligations

Pursuant to N.Y. Ins. Law § 3420(d)(2), if [short carrier name] intends to disclaim liability or deny coverage for any reason, it must provide written notice of such disclaimer as soon as reasonably possible — courts have interpreted this to require disclaimer within approximately 30 days of the date the insurer knew or should have known of the grounds to disclaim.

An untimely disclaimer under § 3420(d)(2) constitutes a waiver of the coverage defense, regardless of whether the underlying policy exclusion would otherwise be valid. See Hartford Ins. Co. v. County of Nassau, 46 N.Y.2d 1028 (1979); White v. City of New York, 81 N.Y.2d 955 (1993).

Any disclaimer must also be made with specificity — vague or boilerplate disclaimers will be deemed ineffective. Anderson Kill P.C., "High Bar of Specificity," 2023.

B. Coverage Defenses Potentially Waived

[short carrier name] is on notice that any coverage defense not raised in a timely, specific written disclaimer will be deemed waived as a matter of New York law.

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 Ins. Co., 10 N.Y.3d 187, 886 N.E.2d 127 (2008), and Panasia Estates, Inc. v. Hudson Ins. Co., 10 N.Y.3d 200 (2008), an insurer's bad-faith breach of the covenant of good faith and fair dealing may give rise to consequential damages beyond the policy limits — provided such damages were reasonably foreseeable at the time of contracting.

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).

Statutory violations cognizable 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 of receiving complete proof of loss (11 NYCRR § 216.4)
☐ Failure to provide written explanation for denial
☐ Unreasonably low settlement offer without basis
☐ Compelling arbitration/litigation by refusing a reasonable demand
☐ Failure to send 90-day status update letters during extended investigation

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 Is Mandatory in New York

Pursuant to 11 NYCRR § 60-2.4 and the mandatory SUM endorsement, disputes over SUM coverage must be submitted to arbitration before the American Arbitration Association (AAA) pursuant to the New York State SUM/UM Arbitration Tribunal rules administered by NYDFS and AAA.

AAA New York State Insurance Arbitration Tribunal
Website: nysinsurance.adr.org
Filing Fee: $250 (non-refundable, paid by claimant at time of filing)
Arbitrators: Licensed New York attorneys with 10+ years of experience, appointed by the NYDFS Superintendent

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. Mandatory AAA SUM arbitration will be filed pursuant to 11 NYCRR § 60-2.4 — costs and delay will follow
2. Bad faith and consequential damages claims will be evaluated under Bi-Economy Market and Rocanova
3. A complaint will be filed with the New York Department of Financial Services (NYDFS), One State Street, New York, NY 10004-1511 | www.dfs.ny.gov | (800) 342-3736, alleging 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
• 11 NYCRR Part 60-2 (SUM Endorsement): law.cornell.edu/regulations/new-york/11-NYCRR-60-2.1
• 11 NYCRR § 60-2.4 (SUM Arbitration): law.cornell.edu/regulations/new-york/11-NYCRR-60-2.4
• AAA NY SUM/UM Arbitration Program: nysinsurance.adr.org/programs/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
• NYDFS OGC Opinion on SUM Coverage (2004): dfs.ny.gov/insurance/ogco2004/rg040428.htm
• 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 — Department of Financial Services: dfs.ny.gov
• CPLR § 213(2) (six-year limitation): law.justia.com/codes/new-york/cvp/article-2/213/
• MVAIC (Motor Vehicle Accident Indemnification Corporation): mvaic.com

This template reflects New York law as of April 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.