What Is UM Insurance and Why It Is So Important?
As an Alpharetta, Georgia auto accident attorney, I too often have clients involved in car accidents with an at-fault driver who only has minimum liability coverage ($25,000.00 in the State of Georgia) and want to know if there is any other coverage available to cover their claim. The short answer is most likely yes. It is called UM coverage.
What Is UM Coverage?
In car accident injury claims, there are potentially two policies that may cover you for your damages. The first everyone is well familiar with—-liability coverage. Liability coverage is the auto insurance the at-fault driver carries through his or her policy.
The second is UM coverage. “UM” stands for Uninsured Motorist or Underinsured Motorist. This potential coverage is through your auto insurance. It protects you by providing coverage to you in the event that a person who causes an accident in which you sustain injuries is either uninsured or underinsured (does not have enough coverage to fully compensate you). Your UM coverage limits are shown separately on your insurance card.
Do You Have UM Coverage?
Unlike liability coverage, Georgia law does not require each driver to have UM coverage. Unless you specifically requested UM coverage on your policy and pay the extra premium for it, you do not have UM coverage. The good news is that the vast majority of drivers have UM coverage with typical coverage limits being the exact same amount as their liability coverage.
Georgia passed a law several years ago that now requires insurance agents to specifically inform clients of the availability of UM coverage and to have the client sign a form requesting or rejecting the added coverage.
Two Different Types of UM Coverage and How It Affects Your Potential Recovery?
The hard part is determining whether your UM coverage will apply to cover you for your injuries and if so, to what extend. It use to be an easier question to answer because there was only one type of UM coverage available to Georgia auto insureds—Reduced Coverage UM. Reduced coverage UM limits will provide you coverage for the difference between the coverage the at-fault party has and the amount of coverage you purchase.
Here is how Reduced Coverage UM insurance works. For example, if the at-fault party has $25,000.00 in coverage and you have $50,000.00 of UM coverage, the at-fault party’s insurance with pay you its limits of $25,000.00 and then your insurance company will pay you $25,000.00, for a total of $50,000.00 all together for your claim. Likewise, if there is $25,000.00 of coverage under both the at-fault insurance and your UM coverage, your UM coverage will not apply since there is no difference between what the at-fault party has and your UM limit.
The second type of UM coverage is the recently added UM coverage product required to be offered to insurance customers called “Add-on coverage.” Under this new coverage, the UM limit provides additional coverage to you up to the limits of coverage you purchase. Using the same number from above: if the at fault driver had minimum coverage of only $25,000.00 and you had $50,000.00 of add-on uninsured motorist coverage, you could receive the $25,000.00 from the at-fault insurance company and $50,000.00 from your own insurance company for a total of $75,000.00. If both of you have $25,000.00 of coverage, no longer will your UM coverage not apply. You could receive $50,000.00 total in this scenario with add-on UM.
It is important to note that in order to get Add-on coverage, you must specifically purchase it from your insurance agent for a higher premium. The passage of the new law in 2008 allowing for such coverage in Georgia does not mean it is automatic. You always want to get Add-On coverage if at all possible.