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Berelc Law Firm, P.C. June 26, 2017

UM/UIM Coverage

All responsible car owners have some form of insurance to pay for damages caused or received due to an accident. However, in some cases, there are drivers who are uninsured or underinsured. Uninsured or underinsured motorist coverage refers to separate, but similar coverages which are known as UM/UIM coverage.

An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements, or whose insurance company denied their claim. For example, a hit and run driver would be considered an uninsured driver. With incidents like hit and runs, purchasing uninsured motorist coverage is a great idea. Uninsured Motorist (UM) insurance is a coverage that protects you if you’re involved in an accident with someone who does not have liability insurance.

An underinsured driver is someone who does not have enough insurance to cover the damages of an accident. The minimum coverage required by law in some states isn’t much. For example, Georgia only requires drivers to carry liability coverage in the following amounts, $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 per accident for property damage. If a driver with low coverage limits causes you to sustain a serious injury, it is possible that the available insurance benefits won’t pay all your medical expenses, this driver is known as an “underinsured” driver. Underinsured motorist insurance (UIM) pays for injuries, such as medical expenses, that result from an accident caused by a driver who does not have enough insurance to pay for all of the injuries of the injured party.

In Georgia, UM/UIM coverage can be considered an add-on or reduction policies. Add-on/excess coverage gives you the maximum amount of money you are insured to cover any damage above and beyond whatever coverage the negligent person has. For example, if the at-fault driver had the minimum $25,000 in liability coverage and you had $25,000 in add-on UM/UIM coverage, then if your losses exceed the driver’s $25,000 liability limits, you would be able to “add-on” your UM/UIM on top of the other driver's coverage to be able to collect up to $50,000 if you had such an injury.

Reduction/traditional coverage only covers you if your UM/UIM coverage exceeds the at-fault driver’s liability limits. If so, the amount of UM/UIM coverage available to you is reduced or offset by that liability insurance. For example, the at-fault driver has $25,000 in bodily injury liability coverage. You have $25,000 in UM/UIM coverage. Subtract the liability of $25,000 from the UM/UIM coverage $25,000, you now have $0 available in UM/UIM coverage. This is because this insurance plan only guaranteed that the at-fault driver would have coverage for $25,000 of damage. So, even if your bodily injury losses exceeded $25,000, you would not be able to turn to your UM/UIM policy. However, if you had $100,000 in reduction/traditional UM/UIM coverage, then you would subtract the at-fault driver coverage of $25,000 from the UM/UIM coverage of $100,000. Therefore you would have $75,000 in available coverage if you possess this insurance plan. It is also important to know that with traditional coverage, the full amount of UM/UIM coverage would be available to you if the at-fault driver had no insurance or if the at-fault driver was unidentifiable (hit and run) or their coverage had been reduced or exhausted by other claims.

If you have any questions regarding the type of coverage you have to be sure to contact your insurance company immediately. The attorneys at the Berelc Law Firm are also here to assist you through tough times. Please call us today to set up a free consultation if you have a question regarding UM coverage.