What happens if someone causes a wreck when they do not have car insurance? Who is going to pay for the damage to your car? Who is going to pay your medical bills? If the wreck was not your fault, it would not be fair for you to have to pay these expenses. Fortunately, there is a type of car insurance you can purchase to protect you from being stuck paying these expenses. It is called Uninsured Motorist Coverage, or UM. Normal people do not wonder how much UM coverage they have…until they need it. In fact, 90% of the people who come into our office do not even know if they have Uninsured Motorist coverage, let alone how much and which type. If you are wondering to yourself “do I have UM?” don’t fret. Georgia has some of the most complicated and complex UM laws in the country, so you can blame your lack of understanding on that. In this post, we are going to take a closer look at UM coverage and discuss how it works so that you can make sure you have the best coverage available to protect you and your family.
Georgia Law requires that every policy of liability car insurance sold must include UM coverage equal to the amount of liability coverage you purchase. See O.C.G.A. §33-7-11(a). In other words, if you purchase $100,000.00 of liability insurance on your car, the policy automatically includes $100,000.00 of UM coverage. However, you have the ability to choose not to purchase the UM coverage that automatically comes with your car insurance. To further complicate matters, you may also choose to purchase UM coverage in an amount less than the liability insurance you have purchased. In this scenario, you may have purchased $100,000.00 of liability insurance but chose only to purchase $25,000.00 of UM coverage. In either of these scenarios, the insurance company will have you sign a “rejection of UM coverage” when you purchase your policy. The insurance agent may offer one of these two options to you as a way of saving a few dollars on your policy.
There are basically two ways UM coverage comes into play. Under Georgia law, an at-fault driver is “uninsured” if he 1) does not have any automobile liability insurance, or 2) does not have enough automobile liability insurance to cover your claim against him. The first instance is not complicated. If the at-fault driver does not have liability insurance, you make your claim against your UM carrier to answer for his negligence. Your claim includes your medical bills you incurred as well as your pain and suffering. Your insurance company is responsible for covering your claim as if it was the company insuring the person who hurt you. After your UM carrier pays the claim, it can pursue repayment from the at-fault driver through subrogation if the at-fault driver’s identity is known.
Looking to your UM carrier when the at-fault driver does not have “enough” insurance is when Georgia law gets uniquely quirky. Unlike any other state, there are two different types of UM coverage available for purchase in Georgia. The first type is referred to as “set off” UM and the second is referred to as “add on” UM. Assume you have a claim worth $150,000.00 and that you have $100,000.00 of UM coverage while the at-fault driver has only $50,000.00 of liability insurance. If you have “set off” UM, the at-fault driver’s insurance would pay it’s $50,000.00 and then your UM carrier would pay $50,000.00. In other words, the $100,000.00 of your UM coverage is “set off” by the $50,000.00 of liability insurance carried by the at-fault driver. In this example, you would be left coming out of pocket for the remaining $50,000.00 of your claim as there is not enough insurance to cover it. However, if you had “add on” UM coverage, the outcome would be quite different. Add on UM coverage does just that, it is coverage that adds on to the available liability insurance. So in this example, the at-fault driver’s insurance would pay $50,000.00 and your UM coverage would pay $100,000.00. With “add on” UM coverage, your entire claim would be covered in this example.
Many clients worry that making use of their UM coverage will cause their car insurance to be canceled or cause the premiums to go “through the roof.” Fortunately, the Georgia State Legislature has protected us from such a possibility. Recognizing that you have done nothing wrong when you find yourself in need of using your UM coverage, your insurance company cannot raise your rates, or refuse to renew your policy, just because you make an uninsured motorist claim. See O.C.G.A. §33-9-40, §33-23-45.
As you can see from the examples above, having the wrong type of UM coverage can be costly. If you do not know which type of UM coverage you have, feel free to give us a call and we will gladly help you figure out the type of coverage you carry. Most people are surprised to learn that the price difference between the types of coverage is negligible while the difference between the benefits are significant. Not having enough insurance to cover a car wreck claim can literally add insult to injury.
 Hit and run drivers fall under category 1, as do phantom drivers who “run you off the road.” However, if a phantom driver causes a wreck without actually “hitting” your vehicle, you must have testimony from a 3rd party witness corroborating the phantom vehicle’s involvement. The 3rd party witness may be a passenger in your own car even if that passenger is making a claim against the phantom driver as well.