All too often, we represent people who have sustained serious injuries but do not have enough insurance coverage available to help cover their medical bills, lost wages, and pain and suffering damages after a wreck.
While you do not have any control over whether the person that causes you an injury has enough liability coverage, you do have complete control over whether you have enough uninsured/underinsured (UM/UIM) coverage to make up for that crummy driver’s crummy coverage.
The bottom line is that spending a few more dollars on your coverage now can make the difference between bankruptcy and being made whole if you find yourself seriously hurt by someone else’s carelessness.
“Liability” Coverage vs. “Uninsured/Underinsured” Coverage
In Georgia, the minimum limits for liability coverage (which covers claims against you if you negligently injure someone) is $25,000. UM/UIM coverage is optional, but most people do have that coverage. When they do, it is usually in the same amount of their liability coverage.
The Cost is Small
You won’t be surprised that your friendly neighborhood personal injury lawyer wants you to get as much insurance coverage as possible. You may be surprised to hear that the difference in monthly premiums for coverage between $25,000 and $100,000 — or even $250,000 — is actually very little. You can log in to your auto insurance account on your phone and run the numbers to see for yourself.
The cost of UM/UIM coverage is also small relative to the policy amount. For example, my wife and I carry coverage of $250,000 per person/$500,000 per loss (plus a $1,000,000 umbrella, which is a topic for another e-mail). My wife has a much better driving history than me, so we pay $189.58 for six months of liability coverage for her. My less stellar driving history puts my premium at over twice hers — $424.83 for six months.
We also both have the same amount in UM/UIM coverage. But despite the big difference in liability coverage costs, we each pay the exact same amount — $92.79 — for our UM/UIM coverage. After all, neither of us have control over whether someone else hits negligently hurts us.
The Implications are Huge
So you get hit by some knucklehead. He or she either has no insurance or — more likely, especially in a serious injury case — has too little insurance. If you have enough UM/UIM, your own insurance company will step into the shoes of the other driver and essentially provide them with that additional coverage. And in addition to it not costing you much more in your monthly premium, Georgia law also prohibits your insurance company from raising your rates for a wreck that is not your fault.
One Final Note – Excess v. Reducible
UM/UIM comes in two flavors: “excess” (also known as “stackable” or “add-on”) and “reducible” (also known as “reduced-by-limits” or “difference than limits”). The difference is simple: excess means your UM/UIM coverage is coverage over and above the negligent driver’s liability coverage, while reducible coverage gets offset by the negligent driver’s coverage. The default is excess — in Georgia, reducible coverage requires a written (signed) rejection by you. The difference is usually only a few dollars per month.
Please do not hesitate to reach out to Lloyd or Alex if you have any questions about our recommendations — or anything else law related!