Named Insured Eligible for SUM Coverage While Operating Police Vehicles: Esurance v. Burdeynyy

Introduction

The case of Esurance Insurance Company v. Volodymyr Burdeynyy (2025 N.Y. Slip Op. 445) presents a pivotal examination of the application of supplementary uninsured/underinsured motorist (SUM) benefits under Insurance Law § 3420(f)(2)(A) in situations involving police vehicles. This appeal before the Supreme Court of New York, Second Department, addresses whether a named insured can receive SUM benefits when injured while operating a police vehicle, challenging precedents set by prior rulings in Matter of State Farm Mut. Auto. Ins. Co. v. Fitzgerald and Matter of State Farm Mut. Auto. Ins. Co. v. Amato.

Summary of the Judgment

Volodymyr Burdeynyy, the appellant, sustained injuries in an automobile accident while operating a police vehicle insured by Esurance, which included a SUM endorsement. Esurance sought to permanently stay arbitration on the grounds that SUM benefits were inapplicable due to the involvement of a police vehicle. Citing the Court of Appeals decisions in Fitzgerald and Amato, the Supreme Court initially granted Esurance’s motion. However, upon appeal, the Supreme Court of New York, Second Department, reversed this decision. The court determined that as the named insured, Burdeynyy is entitled to SUM coverage despite operating a police vehicle, thereby distinguishing his situation from the cited precedents.

Analysis

Precedents Cited

The judgment extensively references two critical precedents:

Matter of State Farm Mut. Auto. Ins. Co. v. Amato (72 N.Y.2d 288): Established that police vehicles are excluded from the definition of "motor vehicle" under Insurance Law § 3420(f)(1), thereby exempting them from mandatory uninsured motorist (UM) coverage.
Matter of State Farm Mut. Auto. Ins. Co. v. Fitzgerald (25 N.Y.3d 799): Further clarified that SUM endorsements do not extend coverage to occupants of police vehicles, reinforcing the exclusion established in Amato.

Esurance relied on these decisions to argue that Burdeynyy should not receive SUM benefits. However, the court in Burdeynyy’s case differentiated his role as the named insured from the occupants distinguished in Amato and Fitzgerald, thereby limiting the applicability of these precedents.

Legal Reasoning

The court undertook a thorough contract interpretation, emphasizing that the SUM endorsement's language should be given its plain and ordinary meaning. It analyzed the definition of "insured" within the SUM endorsement, noting that it explicitly includes "you, as the named insured." This inclusion implies that as the primary policyholder, Burdeynyy is eligible for SUM benefits irrespective of the type of vehicle he operates at the time of the accident.

The court also highlighted that the exclusion of police vehicles in Amato and Fitzgerald was specific to the definition under Insurance Law § 3420(f)(1) concerning UM coverage. However, the SUM endorsement operates under § 3420(f)(2)(A), which, upon careful reading, does not impose the same exclusion when the named insured is pursuing benefits under their personal policy.

Furthermore, the court criticized Esurance's interpretation of the precedents, asserting that they did not account for the scenario where the named insured seeks benefits under their own SUM endorsement while operating a police vehicle.

Impact

This judgment sets a significant precedent by clarifying that the exclusion of police vehicles from "motor vehicle" definitions under UM/SUM provisions does not extend to named insureds seeking SUM benefits under their personal policies. Future cases will likely reference this decision when addressing similar disputes, potentially expanding the scope of SUM coverage eligibility.

Insurance companies may need to revisit their policy language to ensure clarity in coverage terms, especially concerning various types of vehicles operated by policyholders. Additionally, policyholders can gain greater assurance of their coverage rights, even in circumstances involving non-standard vehicles like police vehicles.

Complex Concepts Simplified

Supplementary Uninsured/Underinsured Motorist (SUM) Coverage

SUN coverage is an optional insurance that provides additional protection to policyholders if they are injured by a driver who lacks sufficient insurance. It supplements the basic uninsured/underinsured motorist (UM) coverage, ensuring that the policyholder can recover damages up to the policy’s limits even if the at-fault driver has minimal or no insurance.

Named Insured

The "named insured" is the primary individual covered under an insurance policy. This person is explicitly listed in the policy documents and holds ownership or is the primary policyholder. In this case, Burdeynyy is the named insured on his personal automobile insurance policy with Esurance.

Insurance Law § 3420(f)(2)(A)

This section of New York Insurance Law mandates that insurance policies provide SUM coverage, specifying that such coverage is available if other liable insurance policies offer limited protection. It ensures that policyholders can receive comprehensive compensation even when facing uninsured or underinsured drivers.

Conclusion

The Supreme Court of New York’s decision in Esurance v. Burdeynyy marks a significant shift in the interpretation of SUM coverage eligibility. By distinguishing the status of the named insured from prior cases involving police vehicles, the court has broadened the scope of SUM benefits, ensuring that policyholders receive due protection under their personal endorsements. This decision not only rectifies the limitations imposed by previous rulings but also reinforces the importance of precise policy language in insurance contracts. Stakeholders, including insurers and policyholders, must now navigate these clarified provisions to understand and assert their coverage rights effectively.