The Office of General Counsel issued the following opinion on March 25, 2003 representing the position of the New York State Insurance Department.

RE: SUM Arbitration

Question Presented:

When there is a disputed claim for SUM benefits available under a motor vehicle liability policy, what remedies are available to an insured to appeal the denial of benefits?


Pursuant to the Department Regulation 35-D, the insured has a right to request arbitration or alternately, may choose to initiate a court action.


A person eligible for SUM benefits under a motor vehicle liability policy wishes to initiate a court action to resolve a dispute over a denied claim for SUM benefits. The SUM insurer has stated that the insured’s sole remedy to resolve the dispute is solely through arbitration.


Pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 60-2-3(f) (1999) (Regulation 35-D), which contains the prescribed endorsement for Supplementary Uninsured/Underinsured Motorist ("SUM") coverage in New York, Condition 12 provides an insured covered under the endorsement with the right to pursue arbitration. The condition provides that "…at the option and upon written demand of such insured, the matter or matters upon which such insured and we do not agree shall be settled by arbitration… pursuant to procedures prescribed or approved by the Superintendent of Insurance for this purpose." This language indicates that the right to arbitration is legally available "at the option" of the insured, and if the insurer exercises such right, the insured is bound by the insured’s election of remedies. The language specifically recognizes that, as arbitration is optional, the insured retains the right to go to court, absent Legislative enactment of mandatory arbitration as the sole remedy available.

Therefore, when there is any dispute over the payment of SUM benefits, an insured will always have the right to arbitrate, or alternately, to initiate legal action.

For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.