Uninsured and underinsured motorist claims in New Jersey and New York

You did everything right. You bought insurance, you drove carefully, and someone else caused the crash. Then you learn that the other driver had no insurance, carried only the legal minimum, or never stopped at all.

In those cases, your own auto policy may be your most important source of compensation, alongside the claims described on our car accident page. Uninsured and underinsured motorist coverage exists for exactly this situation. But a claim against your own insurer is still a claim against an insurance company, with its own notice rules, consent requirements and deadlines. This page explains how these claims work in New Jersey and New York. It is general information, so talk with a lawyer about your own policy and facts.

What UM, UIM and SUM coverage do

Uninsured motorist (UM) coverage pays for your injuries when the at-fault driver has no liability insurance, or when the driver is a hit-and-run driver who cannot be identified. It stands in the shoes of the insurance the other driver should have had.

Underinsured motorist (UIM) coverage applies when the at-fault driver has insurance, but not enough to cover your losses. In New York, the combined uninsured and underinsured coverage is called supplementary uninsured/underinsured motorist (SUM) coverage.

These coverages pay for the same kinds of losses you could recover from the at-fault driver, including pain and suffering, lost earnings and medical expenses not paid by other benefits. The limits of your policy cap what you can receive.

New Jersey UM and UIM coverage

A standard New Jersey auto policy must include uninsured motorist coverage at least equal to the state minimum liability limits. For policies issued or renewed on or after January 1, 2026, those minimums are $35,000 per person and $70,000 per accident, up from $25,000 and $50,000.¹² On a standard policy, insurers must also offer UM and UIM coverage up to at least $250,000 per person and $500,000 per accident, but your UM and UIM limits cannot exceed your own liability limits.¹

That last rule surprises people. If you chose low liability limits to save money, your UIM coverage is capped at that same low level. Raising your liability limits is often the only way to buy meaningful UIM protection.

When a driver counts as underinsured

New Jersey uses what is often called a limits-to-limits comparison. A vehicle is underinsured only when the total of all liability coverage available to the at-fault driver is less than the UIM limit on the injured person’s own policy.¹

Then comes the offset. Your available UIM coverage is reduced by the amount you recover from the at-fault driver’s liability insurance.¹ For example, if the at-fault driver has a $35,000 policy and you have $100,000 in UIM coverage, the driver is underinsured. If the driver’s insurer pays the full $35,000 and your damages are worth more, the most your UIM coverage can pay is $65,000.

New Jersey does not allow stacking. You cannot add together the UIM limits on several cars on one policy, or on several policies. Recovery is limited to the highest applicable limit.¹

Step-down provisions

A step-down provision is policy language that lowers the coverage available to some people, often to the limits of their own personal policy. In Pinto v. New Jersey Manufacturers Insurance Co., an employee was hurt while driving a work truck owned by a company affiliated with his employer. The employer’s policy carried $1 million in UIM coverage, but a step-down clause limited him to the $100,000 UIM limit on his own personal policy. The New Jersey Supreme Court enforced the clause, noting that its case law recognized step-down provisions.³

The Legislature later changed the rule for business policies. A policy issued in New Jersey to a corporate or business entity may not give an employee less UM or UIM coverage than it gives the named insured, and it is treated as providing its maximum UM or UIM coverage to employees, whether or not they have other coverage.¹ Step-down language can still appear in other policies, so the exact wording of every potentially applicable policy matters.

Settling with the at-fault driver without losing your UIM claim

This is the most common trap in UIM cases. When the at-fault driver’s insurer offers its full policy limits, it will ask you to sign a release. A release ends your claim against the driver, and it can also end your own carrier’s right to recover what it pays you from that driver, known as subrogation.

New Jersey UM and UIM coverage is subject to policy terms approved by the Commissioner of Banking and Insurance, including terms on unauthorized settlements and subrogation.¹ In Longworth v. Van Houten, the Appellate Division described the procedure that protects everyone. An insured who receives an acceptable settlement offer from the at-fault driver should notify the UIM carrier. The carrier may then pay its insured the same amount in exchange for an assignment of the claim against the driver, which preserves its subrogation rights. The court said 30 days should be regarded as the presumptive time for the carrier to respond if notice is given before a trial date is assigned.⁴

This is often called a “Longworth notice.” Your policy may contain its own consent-to-settle terms, so the policy should be read before anything is signed.

New York has a parallel rule built into the mandatory SUM endorsement. If you settle with a negligent driver for the full available limits, you may sign a release 30 calendar days after your insurer receives written notice, unless within that time the insurer agrees to advance the settlement amount.¹⁰

Hit-and-run claims and reporting rules

When a driver hits you and leaves, report the crash to the police right away and get the report number. Prompt reporting is required for some claims and helps prove all of them. Our page on pedestrian and bicycle crashes covers hit-and-runs involving people on foot or on bikes.

In New Jersey, a hit-and-run vehicle as described in the Unsatisfied Claim and Judgment Fund Law is treated as an uninsured vehicle under UM coverage.¹ If no UM policy applies to you, you may be able to make a claim through the Unsatisfied Claim and Judgment Fund. A notice of intention to make a claim generally must be filed within 180 days of the accident, with limited exceptions, such as for a person who was physically unable to give notice in time.⁵ For a hit-and-run, the claimant must show that all reasonable efforts were made to find out the identity of the vehicle, its owner and its driver.⁵ Your own UM policy may also contain reporting conditions.

In New York, the SUM endorsement covers a hit-and-run vehicle only if the accident was reported within 24 hours, or as soon as reasonably possible, to a police, peace or judicial officer or to the Commissioner of Motor Vehicles. You must also file with your insurer a statement under oath that you have a claim against a person whose identity cannot be determined, and make your own vehicle available for inspection if asked. The unidentified vehicle must have caused injury through physical contact with you or with the vehicle you were in.¹⁰

MVAIC in New York

The Motor Vehicle Accident Indemnification Corporation, known as MVAIC, provides coverage for “qualified persons” injured by uninsured or unidentified vehicles when no policy of their own applies. A qualified person is generally a New York resident, or a resident of another state or country that offers similar protection to New Yorkers. The definition excludes people who are covered as insureds under the uninsured motorist coverage New York law requires on auto policies, as well as an uninsured vehicle’s owner and the owner’s spouse riding as a passenger.¹²

MVAIC deadlines are short. For a claim involving an identified uninsured driver, the claimant must file a sworn notice of claim within 180 days after the claim accrues. For a hit-and-run, the accident must have been reported within 24 hours to a police, peace or judicial officer, and the notice must be filed within 90 days after the claim accrues. Late filing is possible only with proof that timely filing was not reasonably possible, or by court order.¹³ An MVAIC hit-and-run claim also requires physical contact between the unidentified vehicle and you or the vehicle you were in.¹⁴

New York SUM coverage

New York’s SUM coverage is governed by Insurance Law § 3420(f) and a mandatory endorsement in the Department of Financial Services regulations. SUM applies when the bodily injury liability limits of the other vehicle are lower than the bodily injury liability limits of your own policy.⁸

The endorsement sets the most the insurer will pay as the difference between your SUM limit and the bodily injury liability payments you received from everyone legally responsible.¹⁰ An insurer may not sell SUM limits higher than the policyholder’s own bodily injury liability limits.⁹ As in New Jersey, buying higher liability limits is what makes higher SUM limits possible.

The endorsement also requires written notice of a SUM claim as soon as practicable, proof of claim on request, and medical examinations by doctors the insurer selects when reasonably required.¹⁰ Missing these conditions can give the insurer a defense, so they should be handled promptly.

When your own insurer delays or denies

Your relationship with your own insurer is different from your relationship with the other driver’s insurer. Your carrier owes you a duty of good faith. Our guide on talking to insurance adjusters explains how to handle calls and requests for statements.

In Badiali v. New Jersey Manufacturers Insurance Group, an insured’s uninsured motorist claim went to arbitration, and the insurer rejected the award. The New Jersey Supreme Court applied the “fairly debatable” standard, under which an insured claiming bad faith in the denial of benefits must show there was no debatable reason for the denial. The Court found the insurer’s position was fairly debatable. It also ruled for future cases that a policy reference to the statutory minimum limit as a basis for rejecting an arbitration award applies only to the amount the insurer must pay, not to the total award.⁷

New Jersey added a statutory remedy in 2022. The Insurance Fair Conduct Act, approved January 18, 2022, applies to people injured in motor vehicle accidents who are entitled to UM or UIM coverage. It allows a claimant to sue an insurer for unreasonable delay or unreasonable denial of a claim, or for certain violations of New Jersey’s unfair insurance practices law (N.J.S.A. 17:29B-4), without proving that the insurer did this as a general business practice. A successful claimant may recover actual damages, with trial verdicts capped at three times the applicable coverage amount, plus interest, reasonable attorney’s fees and litigation expenses.⁶

Arbitration of UM and UIM claims

Many UM, UIM and SUM claims are decided by arbitrators rather than juries. In New Jersey, UM and UIM coverage is subject to policy terms approved by the Commissioner of Banking and Insurance, including arbitration terms, so the procedure depends on your policy.¹ Badiali shows that what happens after an award, including whether a carrier may reject it, can turn on the policy language.⁷

In New York, if you and your insurer disagree about whether the other driver was at fault or how much is owed, the SUM endorsement lets you demand arbitration in writing.¹⁰ SUM arbitrations are administered by an organization designated by the Superintendent of Financial Services, and the arbitrators are experienced New York attorneys appointed by the Superintendent.¹¹

How Parra Klein handles uninsured and underinsured motorist claims

We start by finding every policy that may apply. That includes your own auto policy, policies held by relatives you live with, the policy on the vehicle you were in, and, for work-related driving, any business policy. We obtain the at-fault driver’s liability limits and compare them with your coverage to see whether UIM or SUM is available.

We send the required notices on time, including hit-and-run statements, MVAIC and Unsatisfied Claim and Judgment Fund filings, and the written notice that must go to your carrier before any settlement with the at-fault driver. We do not let a release be signed until the consent period has run.

We work with your treating doctors to document your injuries, and we present the claim to your own carrier the same way we would present it to a jury. When a carrier delays or underpays, we evaluate whether the Insurance Fair Conduct Act or other remedies apply. We prepare UM, UIM and SUM claims for arbitration or trial.

Arlene Parra and Juan Carlos Reyes are fluent in Spanish, and we serve clients in Spanish from the first call. We meet clients at our offices in Elmwood Park and Union City, New Jersey, and in Manhattan, and we offer remote consultations. There is no attorney’s fee unless we recover money for you.