A: It is additional insurance coverage designed to provide an extra layer of protection to you in the event the person who caused your accident does not have sufficient insurance to compensate you for your injuries.
Here is a perfect example. I recently represented a young woman who was a passenger in a car that was involved in an accident. The driver of her car made an improper left turn, not realizing that the oncoming car was too close for her to turn safely.
My client suffered fractures to her hand and required surgery.
Being a passenger, my client had no liability in causing or contributing to her injuries. Clearly, the driver of her car should never have made that left turn. However, the driver only carried the minimum insurance policy required in New York; $25,000.
Importantly, that amount of money was clearly insufficient to compensate my client for her injuries. Further investigation revealed that there was supplemental underinsured motorist coverage of $100,000. That meant that this extra insurance policy, also known as SUM, would kick in and provide the difference.
Here's what I mean. Since there wasn't enough insurance to properly compensate this young girl, the supplemental insurance policy kicked in to then supplement the available insurance up to a maximum of $100,000. Therefore the SUM policy contributed $75,000 to make a total of $100,000.
After reading this, I strongly recommend that you find your automobile insurance policy and check to see how much SUM coverage you have. If it is minimal, you should strongly consider increasing the amount as soon as possible.