This is something a little different. My client was in a car accident and suffered a broken leg. The other driver pled guilty to a traffic ticket, so we have a strong case on liability. A fracture is a qualifying injury under NY Insurance Law Article 51, and this was a relatively serious one - the femur (the big bone in your thigh). The fracture was "reduced" (fixed) with "open reduction - internal fixation" (ORIF). Meaning they opened his leg up (in surgery) and put a rod in to hold the bone together.
The defendant has a 50/100 policy, meaning there's $50K available to the plaintiff. Fortunately for my client (and me, and the referring attorney), the client has 100/300 SUM coverage. SUM is supplementary underinsured motorist coverage. The 100 is what's applicable here. So if the case is worth more than $50K, we can recover more than the defendant's policy limits by going to the client's own insurer.
In this case it gets more interesting because the defendant apparently has assets. Usually someone with limited insurance is relatively poor, and no one's going to bother going after them. I talked with my client's insurance company today and they did an asset check on the defendant. He owns rental property. That's more than just owning a house, and it may lead our insurer to make a claim against that guy's assets.
This, by the way, is a big lesson for people who aren't familiar with this issue. Make sure you have a lot of coverage. In my mind, anyone with any prospect of having significant income or wealth in the next few years should have at least $100K in coverage. And if you're a lawyer, doctor, etc., you should have a million or more. I have a $1 million umbrella, and am thinking about going to $2 million. Extra coverage is really not very expensive. The difference for the defendant in this case would have been something like $50 to $100 per year to have $100K in coverage. Now it may cost him $50K.
So how does SUM coverage work? First, in this case it's likely that the defendant's insurer will offer it's $50K policy. But we can't just take it. We first have to present that proposed settlement to plaintiff's insurer. They get an opportunity to intervene. I'd like to say I fully understand how this works, but I don't.
As best I understand it, if they want to intervene, they have to put up the $50K offered by the defendant's insurer. Then they can intervene and take over the defense of the case. More likely, they will not intervene, but rather will settle with us and then pursue a claim against the defendant for the amount they have to pay out.
However, as I think about this on the fly, it may be that defendant's insurer would not be able to settle under those circumstances. I don't think it's a problem, but it could be. This stuff gets tricky, and I've never come across this exact situation. Another learning experience.
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