Uninsured Motorist (UM) Coverage in the State of Georgia
RECENT CHANGE IN THE LAWBeginning January 1, 2009 Georgia drivers finally got what they pay for, at least when it comes to Uninsured Motorist Coverage.
Maybe you, like me, received a notice from your automobile insurance company in 2008 regarding your Uninsured Motorist coverage. The reason you got that notice was because legislation passed in 2008 required insurance companies to send a notice to each policyholder advising of new coverage options.
If you received such a notice, and if it was anything like the notice I received, you probably wondered what in the world it meant. The notice I received was written in legalese and my hunch is most people who got it tossed it in the trash - a completely understandable instinct!
I want to help you understand the 2008 amendment to the Georgia Uninsured Motorist coverage statute. This is more important then you might think. I don't want anyone to miss an opportunity to make sure they truly are fully covered.
FIRST - WHAT IN THE WORLD IS UNINSURED MOTORIST COVERAGE?First, let's talk about what Uninsured Motorist coverage is and why it is so important.
When most people buy car insurance they focus on liability coverage. You buy liability coverage to protect others in the event you cause an accident and someone is injured. Uninsured Motorist coverage has a different purpose. You buy Uninsured Motorist coverage to protect yourself and your family.
Let's say you are involved in a wreck. The other driver was driving without insurance. Who pays for your damages? Well, if you do not have Uninsured Motorist coverage, you probably pay. If you do have Uninsured Motorist coverage, your own insurance company pays. Essentially when you have Uninsured Motorist coverage and are damaged by another driver who has no insurance, your own insurance company "steps into the shoes" of the other driver and pays you just as if that other driver had insurance.
Also, Uninsured Motorist coverage applies when the another driver is UNDERinsured.
SECOND - UNDERSTANDING UNDERINSURED MOTORIST COVERAGETo give an example of how Underinsured Motorist works consider a car crash where you are injured and your medical bills are $75,000.00. Let's say the driver who caused the crash only has $50,000.00 of liability coverage. That would mean the most you can recover from the other driver's insurance company would be $50,000.00. You are left with $25,000.00 of unpaid bills. You are only partially compensated.
But if, in the same scenario, you were carrying $75,000.00 of Uninsured Motorist coverage you would be protected. The other driver's insurance company would pay the first $50,000.00 and your own insurance company would pay the last $25,000.00.
Pretty neat, huh? We are big fans of Uninsured Motorist coverage here at Dupee & Pearson, LLC. You might be surprised how often it saves the day!
NEXT - WHY THE LAW NEEDED TO BE CHANGEDNext, I want to try to explain why the Uninsured Motorist statute needed to be changed and why the 2008 amendment is such good news for Georgia consumers.
In a city like Atlanta, Georgia (where we practice) there are a LOT of uninsured drivers on the roads. Even among those that are insured many only carry minimum limits. What would you do if you or a loved one were injured by a driver with no (or too little) insurance? How would you pay the medical bills?
Uninsured Motorist (UM) Coverage is designed to protect you when you are hurt by an uninsured or underinsured driver. Everyone needs to purchase UM coverage. It is cheap and easy to buy and could save you thousands or hundreds of thousands of dollars.
The 2008 Georgia legislation improves UM coverage for Georgia drivers. Under the old law there was a problem that needed fixing. The problem was this: the old law only allowed drivers to use that part of their UM coverage that was more than the liability coverage.
AN EXAMPLE WILL CLARIFYPrior to the effective date of the new statute (January 1, 2009) let's say you went out and bought $50,000.00 of UM coverage. You then were injured in a wreck and the at fault driver had $50,000.00 of LIABILITY coverage. Let's assume your medical bills totaled $75,000.00. How much could you recover?
Well, under the old law you could recover just $50,000.00! Yes, only $50,000.00, leaving you with $25,000.00 of uncompensated medical bills. Why? Because under the old law your insurance company only had to pay you if your UM coverage was greater than the liability coverage. So in the scenario I've described you could recover $50,000.00 from the at fault driver's insurance company but nothing from your own.
Does this make sense? No! It makes no sense whatsoever. If you paid for UM coverage you should be able to use it! Under the old law Georgia consumers who had purchased UM coverage often found themselves in a situation where they had paid for, essentially, nothing.
A QUICK DETOUR - PLEASE BE SURE YOU HAVE UNINSURED MOTORIST COVERAGEBy the way - Atlanta drivers often tell me they carry "full coverage." But when I ask them if they carry Uninsured Motorist (UM) insurance they do not know. UM insurance is absolutely essential coverage and it is very inexpensive. You can add it today simply by calling your insurance agent or company and telling them you want it.
Please purchase UM coverage! I don't want any person to miss an opportunity to make sure they and their family truly have "full coverage" - often people find out they do not when it is too late to do anything about it - after they have an accident or injury.
BACK TO THE NEW LAWBack to discussing the new law - as I have said, under the law as it used to be consumers often did not get what they had paid for. That is because under the old law it was possible to pay for UM coverage but not be entitled to any UM benefits when you were injured in a wreck. This was due to something called the "liability set off".
The "liability set off" essentially was a way for your insurance company to not pay you. Here is how it worked. Assume the following facts:
You are injured in a car wreck and your medical expenses total $100,000.00. The driver who caused your injuries only had $50,000.00 in liability coverage. You had $50,000.00 in UM coverage. The "liability set off" allowed your insurance company to subtract (or set off) the amount of the at-fault driver's liability coverage from the amount of your UM coverage, thereby reducing your benefits to nothing, zero, nada.
AN EXAMPLE OF "SET OFF"Here is how it worked under the old "set off" law: if the at-fault driver had $50,000.00 in liability coverage and the injured driver had $50,000.00 in "set off" UM, the payment due from the UM coverage would equal $50,000.00 minus $50,000.00, which is $0 (zero!)
Do you see the problem? In this scenario, you were getting no value out of the UM coverage you paid for.
What the new law does is allow you to purchase "stacking" UM coverage. "Stacking" refers to eliminating the "liability set off" and allowing consumers to get the full benefit of what they pay for. Instead of subtracting (or getting a "set off") for the amount of the at-fault driver's liability coverage, your insurance company now has to add (or "stack") the liability and UM coverages together and pay you the sum of the two coverages.
Now that makes a lot more sense then the old way, doesn't it?
AN EXAMPLE OF "STACKING"The simplest way of explaining the change is to give an example.
If you carry "stackable" UM coverage (the "stackable" bit is what is new - the new law allows you to buy UM that "stacks" on top of the at-fault driver's liability coverage) the example I gave earlier would change like this: if the at-fault driver has $50,000.00 of liability coverage and the injured driver has $50,000.00 "stackable" UM coverage, the payment due from the UM coverage will be $50,000.00 PLUS $50,000.00, which totals $100,000.00.
Do you see how having "stackable" UM coverage changes everything? You go from a situation where you are half-compensated for your medical bills to a situation where all your medical bills get paid.
LAST CALL!Finally, and this is for both those who already have UM coverage and those who are going to call later today and add it (I hope), MAKE SURE YOU PURCHASE ENOUGH COVERAGE! Here at our injury law firm we recommend at least $100,000.000 per person/$300,000.00 per occurrence. More is ideal. Again, UM coverage is cheap! Buy a lot of it and protect yourself and your family in the event you are badly injured by an uninsured or underinsured motorist.