Dec 18, 2012

Cuomo vetoes supplementary uninsured auto insurance bill

Gov. Andrew Cuomo this week vetoed legislation (A.10784) that would have brought New York into line with laws in 26 other states by changing the default limit for supplementary uninsured/underinsured motorist ("SUM") coverage.

This bill would have changed the required amount of supplementary uninsured/underinsured motorist coverage from a maximum amount that is the same as bodily injury to a minimum amount that is the same as bodily injury. It also would have allowed the insured the option of declining SUM coverage or purchasing lower amounts than the statutory minimum.

The bill was introduced in response to newspaper reports of drivers suffering life-altering injuries in automobile accidents caused by uninsured and underinsured and hit-and-run drivers. The victims, not aware of the difference between liability and SUM coverage, found their medical and other expenses were not fully covered because of inadequate SUM limits.

Claiming that the veto allows consumers to "choose what level of SUM coverage makes sense for them," Cuomo stated in his veto message that "no other optional coverage is treated this way" and "I will not sign into law a measure that places such an unacceptable choice on New Yorkers." The irony of the veto is that it was issued at the same time New York announced federal approval to set up an online marketplace for individuals and small businesses to buy health insurance required by the federal health-care law.

Producers are advised to remind New York drivers to purchase liability insurance above the bare legal minimum of $25,000, and that increasing liability coverage does not provide a corresponding increase in protection for them and their families. Drivers who are not told about this distinction or who purchase insurance online may fail to appreciate that they do not have the coverage that they think they have when they need it most.