N.Y. Gov. Vetoes Supplemental Uninsured/Underinsured Motorists Bill

December 19, 2012

New York State Governor Andrew Cuomo this week has vetoed a bill concerning the Supplemental Uninsured/Underinsured Motorists (“SUM”) coverage.

Gov. Cuomo struck down the bill, S.7787/ A.10784, this Monday, Dec. 17. Both chambers of the New York State legislature approved the bill last June but it wasn’t delivered to the governor until Dec. 5.

The bill’s sponsors will likely work on a modified bill and “try to get something more to the governor’s liking” when the state legislature convenes in January, said Tim Dodge, director of research at the Independent Insurance Agents & Brokers of New York Inc.

In his veto message, Gov. Cuomo stated that, “This bill, if enacted, would among other things, reverse existing law by requiring consumers to pay for supplementary uninsured/underinsured motorist (“SUM”) coverage unless they affirmatively opt out of such coverage. No other optional coverage is treated this way. Consumers should be free to choose what level of SUM coverage makes sense for them.”

“I will not add to the financial burdens already faced by New York’s consumers. The Department of Financial Services will be exploring ways to increase consumer education on the benefits of SUM coverage so that consumers can make a more informed decision about whether or not to purchase it, but I will not sign into law a measure that places such an unacceptable choice on New Yorkers,” the governor stated.

Under the current requirement in New York, insurers have to offer SUM coverage to their customers, in amounts up to the amount of the customer’s Bodily Injury/Property Damage Liability coverage — but they can issue policies without the coverage unless the customer specifically accepts the offer, according to the Independent Insurance Agents & Brokers of New York Inc.

The rejected bill would have required insurers to issue the policies with SUM coverage, with limits equal to the BI/PD Liability limits — with the coverage remaining on the policy unless the customer specifically requests that it be removed or reduced.

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