- Sanju Nagin
The Importance of Uninsured/Underinsured (UM/UIM) Motorist Insurance
Georgia law requires drivers to purchase at least minimum limits of insurance.
Navigating the world of auto insurance coverage can be confusing and stressful. Under Georgia law, drivers are required to carry minimum limits of liability insurance. These limits include:
$25,000.00 per person for bodily injury
$50,000.00 per accident for bodily injury
$25,000 per accident for property damage
Generally, an at-fault driver’s insurer is legally responsible to pay for the property damage you sustain in a wreck. The at-fault driver’s insurer is also legally responsible to pay the losses you incur, such as medical bills and lost income. Losses also include the pain and suffering you experience as a result of the injuries. Those damages, most often, must be pursued by a competent attorney in order to assure that you, the victim, are paid full compensation for your injuries resulting from an accident. But, despite the law requiring drivers to purchase these minimum limits, recent statistics show that up to 10% of Georgia drivers do not carry insurance at all. And in severe and catastrophic injury cases, minimum limits of insurance are not adequate to compensate you for your injuries.
Uninsured/Underinsured motorist insurance protects you when the at fault driver either does not have insurance or has insufficient insurance to fully compensate you for your injuries.
In Georgia, drivers have the option of purchasing uninsured/underinsured motorist (UM/UIM) coverage in addition to state required minimum liability coverage. In fact, by default, when you purchase insurance in any amount, your carrier must offer UM/UIM in the same amount of the bodily injury liability. Unless you expressly reject the coverage, you have likely paid for and have the coverage. By purchasing UM/UIM, you can recover your losses and damages from your own insurer if an at-fault driver either does not carry insurance or carries insufficient insurance to fully compensate you for your injuries. This coverage will also apply if you are injured in a hit-and-run and the at-fault driver cannot be located or if you are injured by another vehicle while a pedestrian or riding your bicycle. It will also normally cover injuries to your spouse, children residing in the house and anyone driving a covered vehicle with your express permission.
Uninsured/Underinsured motorist coverage may be “Stacking” or “Non-stacking” coverage.
UM/UIM coverage is an added expense to your premium, but that expense is usually fairly minimal. And the type of UM/UIM you elect is important. In Georgia, when purchasing UM/UIM insurance, you have the option of selecting either stacking (add-on) or non-stacking (reduced-by) coverage. Add-on coverage increases the total liability coverage available to you. For example, if an at-fault driver carries $50,000 in liability coverage and you have $50,000 in add-on UM/UIM coverage, there would be a total of $100,000 in coverage to compensate you for your losses. On the other hand, reduced-by coverage (while generally less expensive) is offset by the liability policy limits. So, if an at-fault driver carries liability coverage of $25,000 and you have $50,000 in reduced-by UM/UIM coverage, your coverage is reduced by the amount of liability insurance held by the at-fault driver; thus, you would only have $25,000 in UM/UIM coverage available after exhausting the at-fault driver’s $25,000.00 in liability coverage (for a total of $50,000 in total coverage for the loss).
There are other situations in which UM coverage can be utilized as well. For example, a client of our firm was hit by a pick-up truck driver who was not an authorized driver on the truck owner’s insurance policy. Because the policy excluded the driver from coverage, the liability insurance carrier denied coverage for the loss. So, while the owner of the at-fault pick-up truck carried insurance, the at-fault driver, who was not covered by that policy, was uninsured. Our client sustained serious injuries in the wreck and required prolonged medical treatment. Fortunately, our client carried UM coverage in the amount of $100,000. Fried Bonder White was able to make a claim for damages on the client’s policy and collect the full amount of coverage. Absent the UM coverage, our client would likely have had no avenue to collect damages for his injuries. Whenever you are injured in a car wreck or by another vehicle, it is important to notify your insurance carrier of a potential loss as soon as possible to prevent any denial of coverage.
The at-fault driver’s injury coverage must be exhausted before you can use your UM/UIM.
Another important aspect of uninsured or underinsured motorist liability coverage is that it may only be used after the at-fault driver’s insurance is exhausted. Of course, if the at-fault driver is uninsured or cannot be found, your UM kicks in immediately. But consider the following: you are seriously injured in a high impact crash and the at-fault driver is insured for the state minimum coverage of $25,000. Odds are there will not be enough insurance to cover the loss. The coverage is further spread thin if the crash involves multiple vehicles and other injury victims. In order for you to access your UIM coverage, the at-fault driver’s insurance limits must be paid out first.
Fried Bonder White regularly represents seriously injured clients in this exact situation who have benefited from the added layer of protection underinsured motorist coverage provides. For example, just last year a client of FBW was hit by an at-fault driver with $100,000 in liability coverage. Our client’s medical bills alone exceeded the at-fault driver’s $100,000 policy limits. After making sure we identified each policy that would provide coverage to fully compensate our client for her injuries, we were first able to collect the policy limits of $100,000.00 from the at-fault driver’s insurance policy. Then, because our client also carried $25,000 in added-on UIM coverage, we were able to obtain that additional amount from her insurance carrier, giving her a total recovery of $125,000 from those two policies.
The bottom line is that the minimal cost of UM/UIM coverage outweighs the expense and risk of a collision with an uninsured or underinsured driver. The added layer of coverage ensures you are adequately protected against the losses and financial burden an accident with an uninsured or underinsured driver can cause.
The attorneys at Fried Bonder White have years of experiencing representing seriously injured clients and their families. If you or a loved one has been injured, contact FBW with questions. We can help.