If you own or drive a vehicle in Georgia you are required to purchase insurance. However, more than 12-percent of drivers on the road today ignore this law and are driving uninsured. In some areas of the country, the rate is as high as 20 percent.
That is the reality you must keep in mind when deciding on a coverage package. If you are not purchasing additional coverage, such as Uninsured/Underinsured Motorist Coverage (UM), you are accepting a one-in-five chance that you, or your family, will not be covered by any auto insurance in the event of a crash.
The only way to protect you and your family from this all-too-common injustice, is to ensure you carry adequate insurance. For a slight increase in monthly premiums, you can purchase hundreds-of-thousands of dollars in additional coverage that will pay you in the event of a crash, regardless of whether the at-fault driver was insured at all.
If you are not sure you have additional coverage such as Uninsured/Underinsured Motorist Coverage (UM), or if you are unsure of your limits, contact your agent now to make sure you upgrade your policies. A small increase in monthly premiums is a small price to pay for thousands of dollars in increased coverage in the event of a serious-injury accident.
When purchasing or upgrading insurance, this is what you need to purchase, and what you need to avoid.
The only type of insurance that is required by law in Georgia is liability insurance. This is the type of insurance that covers other vehicles and people when you cause a wreck. The minimum limits are $25,000 for property damage. For bodily injury, the minim limit is $25,000 per person, and $50,000 per accident.
Keep in mind that if you cause someone serious injury it is likely their damages will exceed $25,000, by tens of thousands of dollars, potentially exposing your personal assets. Therefore, it is important to protect yourself and those assets by purchasing more coverage, such as $250,0000, per person and $500,000, per accident. You can also speak to your agent about additional “excess” liability coverage such as as an “umbrella policy” that will kick in an extra million dollars or more, in the event you cause someone a catastrophic injury. Covering the approximate full value of all of your assets is the only way to truly guarantee those assets are protected should the worst occur. Therefore, we recommend you purchase liability coverage of at least the value of all of your assets.
Uninsured/Underinsured Motorist Coverage (UM)
This is not a required coverage in Georgia, but it is a must-have on any policy. Uninsured/Underinsured Motorist coverage (UM/UIM) is insurance that applies to cover you, your family and passengers, in the event you are hit by someone who has no auto insurance, or does not carry enough insurance to cover your total damages. Again, with so many drivers on the roadway completely uninsured, or carrying a minimum limit of only $25,000, there is a very good chance you will be left seriously short on coverage in the event of a serious accident. The only way to guarantee adequate coverage is to purchase a hefty amount of UM.
But beware, not all UM coverage in Georgia is created equal.
In Georgia, there are two types of Uninsured Motorist coverage. We will call these “good” UM coverage, and “bad” UM coverage.
“Good” UM Coverage
First the good. Since 2008 the default UM coverage is what is known as “excess” or “add on” UM coverage. This is UM that is added to the total liability limits in the case. So if you carry $25,000 in “add on” UM, your $25,000 will be added to whatever insurance limit is covering the at-fault driver.
Let’s say you are in a car crash and suffer $50,000 in total bodily injury damages. The at-fault driver has the state minimum of $25,000 liability coverage leaving you $25,000 short of covering your total damages. Your add-on UM policy would then kick in another $25,000, providing you a total coverage of $50,000 ($25,000 liability, plus $25,000 UM).
Note that for a few dollars more on your premium every month, you gained $25,000 in additional coverage. I personally recommend carrying at least $250,000 per person, and $500,000 per accident, as it does not take much to suffer damages in excess of that in a serious-injury crash.
“Bad” UM Coverage
Now, lets talk about the “bad” UM.
Unfortunately, Georgia law allows insurance companies to sell a UM product that offers significantly less coverage that the scenario above. This is what I call “bad UM.” Insurance agents typically refer to it as “set off” or “traditional” UM.
Under bad UM, your UM policy limit is “set off” from the total amount of liability coverage in the accident. The policy only pays if it is greater than the total amount of liability coverage. So under the above-referenced example, the liability driver has only $25,000 in coverage, but your damages are $50,000. If you purchased “good UM,” you would have adequate coverage as your policy would kick in another $25,000 in coverage.
However, if you purchased bad UM, you are still left with a $25,000 shortfall. Because your UM policy only pays if it is greater than the total amount of liability coverage under this scenario you would have no additional coverage at all. Because your UM policy limit ($25,000) is not greater than the liability policy limit ($25,000), the UM policy pays nothing. Thus, you are left $25,000 short of covering your $50,000 in total damages, in exchange for saving a few bucks a month on your insurance premium by keeping “bad” UM.
Given that the vast majority of auto policies written in the state only carry $25,000, this is a scenario we see over-and-over again. If you have this type of insurance, contact your agent immediately to upgrade your policy to “good” UM, also known as “add on” or “excess UM.” And while you are at it, increase your limits to the recommended $250,000 per person, $500,000 per accident or more.
Another optional coverage in Georgia that we recommend is Medical Payments coverage.
This is a type of no-fault coverage that covers any medical expenses related to your accident, regardless of who is at fault. It is not a required coverage, so you may have to ask for an explanation from your agent. However, we encourage everyone to purchase $5,000 to $10,000 in med pay when selecting a coverage package. Even if you have health insurance, you may be facing a few thousand dollars in out-of-pocket expenses if you have not met your annual deductible. You can use the med pay to pay those expenses while you wait on the case against the at-fault driver to resolve, which may take many months or even years.
Secondly, it is almost inevitable that some of your medical bills will not be covered by insurance. Either some providers, such as the ambulance company, will refuse to bill your health insurance, or some treatments you undergo will not be covered by the insurance. That leaves out-of-pocket expenses you will have to cover up front or pay at the end of the case assuming your claim is successful. Using Med Pay to pay these expenses up front is a convenient way to avoid outstanding bills lingering for months. Plus, the bills will be paid again by the at-fault drivers insurance at the end of a successful case, creating an added financial benefit for you.
It is always a good idea to review your coverage package to make sure it is adequately protecting your family. Minimum limits in Georgia, in no way guarantee you will be insured at a
ll in the event of crash. Furthermore, minimum limits guarantee you and your family will be facing a shortfall of tens-of-thousands of dollars — possibly even hundreds of thousands of dollars — in the event of a serious injury crash. Contact your agent and you may be surprised at how little your premium will increase every month in exchange for adequate insurance protection.