Last Updated on November 24, 2020 by Theodore Spaulding
We find that many individuals who call us for help with serious injuries sustained after an auto accident do not realize that there are potentially more sources of insurance coverage than just the at-fault driver’s automobile policy. This is a good thing because more often than not, we see car accident cases where the at-fault driver does not have anywhere close to enough coverage to fully compensate our clients.
We strongly believe this is the number one reason injury victims should hire an attorney after a motor vehicle accident, as your attorney will know how to look for available insurance coverage for your losses.
Let’s talk about UM coverage and how it can be so important to whether you can fully recover for all of your losses after a severe wreck.
What Is UM Insurance?
To answer this, we must start with what it is not. UM insurance is not something the at-fault driver carries.
Instead, it is coverage you purchase typically on your own auto policy. It stands for Uninsured Motorist or Underinsured Motorist coverage. It is there to protect you when you are injured in an accident caused by the negligence of another driver.
It provides you with coverage in two general scenarios:
- When the at-fault driver has NO insurance coverage at all—thus Uninsured Motorist coverage; or
- When the at-fault driver has insurance coverage but not enough to fully cover all of your damages.
Again, the purpose of UM coverage is to protect you from either recovering nothing when the at-fault driver has no insurance or to protect you from not fully recovering compensation when the at-fault driver does not have enough coverage. This is important because the minimum liability coverage in Georgia is only $25,000.00.
Not Everyone Has UM Coverage?
You may not have UM coverage. Why? Because unlike auto liability coverage, Georgia law does not require you to have it. You can decline the coverage completely or choose a lower limit of coverage than you have for liability coverage on your policy.
Look at your insurance policy declarations page to find out whether you have the coverage. It will be a separate line item of coverage with its own premium that is paid for the particular coverage. If you don’t have coverage, we highly suggest that you add it immediately.
How Does It Work—Two Types of UM Policies
Once you know what it is, whether you have UM coverage is easy to figure out. The difficult question is whether your coverage will apply to your car accident claim, and if so, to what extent.
The reason is that there are two UM coverage products to choose from in Georgia. Depending on which one you purchase and the amount of coverage provided by the at-fault driver, the answer to whether it applies and to what extent will be different in each case.
Let’s discuss the two different types of UM coverage to learn more about how your UM coverage may or may not apply.
First Type—Reduced Coverage UM
This type has two names: Reduced Coverage or Difference-in-Coverage UM. As the name suggests, this type of UM coverage applies to the extent that its limits are above the limits of coverage the at-fault driver has on their automobile. But only for the difference between the two numbers.
Here is how it works: At-fault driver has $100,000.00 in coverage, and you have $300,000.00 of UM coverage that is Reduced Coverage or Difference-in-Coverage UM. Because of your injuries, your case is worth $400,000.00. As a result, the at-fault driver’s insurance will pay you the limit of $100,000.00. Then, your UM will pay you only the difference between its $300,000.00 limit and the at-fault driver’s $100,000.00 limit, or $200,000.00. Your total recovery is $300,000.00 in this scenario.
Second Type—Add On UM
This is a newer UM product in Georgia and the name reveals what it does. Unlike Reduced Coverage UM, Add On UM provides additional coverage to you up to the limits of coverage you purchase, added on to the coverage provided by the at-fault driver.
This is the UM product you want. For example, under the above scenario, if you only recovered $300,000.00 total for a claim worth $400,000.00, with Add On UM, you recover the full $400,000.00.
Here is how it works. You first recover the $100,000.00 from the at-fault driver’s insurance company just like in the other scenario. What is different is your UM coverage applies in addition to this money. In other words, it is added on top of the $100,000.00. Therefore, you receive $300,000.00 from your UM carrier, not $200,000.00 in this scenario.
Keep in mind that you must specifically request the particular type of UM coverage that you want from your agent.
Insurance coverage available to accident victims can be a difficult topic to grasp fully, even for lawyers. This is especially true for UM coverage. There are many potential scenarios where UM coverage may apply in addition to UM coverage on your own automobile or the automobile you were in at the time of the accident. This is why it is always advisable to discuss your claim with an experienced car accident attorney first.
For close to 15 years, Mr. Spaulding has helped victims of negligence across the state of Georgia resolve personal injury disputes, and he’s received a remarkable number of awards and honors from the legal community recognizing his commitment to clients and to the metro-Atlanta area.
As an undergraduate, Mr. Spaulding belonged to the Phi Beta Kappa honors fraternity at the University of Georgia, and he obtained his legal training at the Georgia State College of Law, where he clerked for the Honorable Judge Rowland Barnes of the Fulton County Superior Court. Mr. Spaulding has also worked for the Securities and Exchange Commission’s Atlanta Enforcement Division. Since 2005, he has dedicated his career to helping the injured victims of negligence and their loved ones win justice in Georgia’s personal injury courts.