Saturday, May 17, 2008

SUM Not Triggered -- Comparison of Combined Single Limit to Split Limits

Matter of Automobile Ins. Co. of Hartford v. Ray
(2nd Dept., decided 5/13/2008)

I feel like it's math class and we're doing word problems every time I review a SUM trigger question or case. There's nothing new in this Second Department decision, but it's a good review of SUM (Supplementary Uninsured Motorists a/k/a underinsured motorists) coverage trigger rules when comparing a combined single limit (CSL) policy to a split limits policy.


Ray, Roberts and Gigante were occupants of Gigante's vehicle, which was insured by AICH s/h/a (sued herein as) Travelers under a PAP (personal auto policy) with a $300,000 CSL (combined single limit) for both BI (bodily injury) and PD (property damage). The Gigante PAP also afforded $300,000 in SUM coverage per person/per accident.

The Gigante vehicle collided with a vehicle being driven by Woods (the tortfeasor), which was insured under a PAP with split BI liability limits of $100,000 per person/$300,000 per accident. That policy afforded PD liability coverage in addition to the BI limits (probably $50,000 or $100,000 per accident, although the decision does not say).

The tortfeasor's insurer paid $100,000 to Ray, $100,000 to Roberts, and $100,000 to Gigante, exhausting its BI liability limits. Ray made a claim for and then demanded arbitration of what she contended was $200,000 in available SUM coverage - the difference between the $300K Gigante PAP CSL and the $100K she had received from the tortfeasor's PAP insurer.

Is there a SUM trigger?


No, said the Second Department, REVERSING the lower court's denial of AICH's petition to permanently stay Ray's SUM arbitration.

Since the Gigante policy's $300K CSL includes PD, the $300K per accident BI liability limits of the tortfeasor's policy were not less than the BI liability limits of Gigante policy.

In a multiple-victim accident, the Gigante policy would provide a total of $300K in coverage for BI less any amount payable for PD. By contrast, the tortfeasor's policy would provide $300K for BI plus any amount payable for property damage. Thus, the tortfeasor is not underinsured for purposes of Insurance Law § 3420(f)(2)(A).

Therefore, $300,000 BI/PD CSL < $100,000 BI person/$300,000 BI accident/$100,000 PD accident. No SUM trigger.

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