The start of a new year is good time for setting new goals, cleaning out crowded closets, and reviewing important paperwork. Now is a great time as a driver in Georgia to look at your auto insurance policy and see if you have enough coverage in the event of an auto accident. Most drivers understand that their insurance policy covers costs like medical bills for accidents that they cause themselves, and some may understand that their policy covers car accidents that are caused by other drivers who have no insurance (known as Uninsured Motorist Coverage or UIM). But what about auto accident where the bills are high and the other driver only carries the minimum amount of coverage required by law? Underinsured motorist coverage (UM) is meant to cover these types of scenarios. As a consumer, it is essential to understand what you may need from your insurance policy.
Georgia requires drivers to carry automobile liability insurance which covers costs related to bodily injury and property damage in the amounts of $25,000 per person and $50,000 per accident. So if you were in an accident with $65,000 worth of medical bills, and the at-fault party only carried the minimum amount of coverage, there would still be $35,000 worth of medical bills left to pay. Depending on what you accepted or rejected when selecting your insurance policy, you might not have enough coverage if you elected “setoff” or “reduction” UM coverage. For example, if you had a policy with UM coverage of $50,000 a person, but the policy you carried was a “setoff” UM policy, the at-fault party’s coverage would be subtracted from that amount. That means only a total of $50,000 of the accident would be covered, leaving you with the $15,000 difference.
Uninsured and Underinsured motorist coverage laws have evolved in Georgia over the last six years, vastly improving the motorist policy options for Georgia drivers Now, Georgia law allows for UM coverage to “stack” on top of the at-fault party’s coverage. Using the example above, if you had “stacking” or “excess” UM coverage, your policy limits would be in addition to the at-fault party’s insurance limits, leaving you with $10,000 of excess coverage instead of a $15,000 deficit. As you can see, while there may have been a limited amount of monthly savings by electing the “set-off” option for UM coverage, the difference between policies can greatly affect you in the event of an accident.