Time and again we have had clients come in after being in a car wreck only to discover that there is no insurance coverage on the car that hit them and a lack of proper insurance coverage on their own car. Then we hear that frustrating phrase, “but I have full coverage, my agent told me so.” At that point we have to explain that the term “full coverage” means different things to different people. This problem is avoidable.
The requirement: Georgia law requires only that all drivers carry at least $25,000 in liability coverage per person and $50,000 per accident. O.C.G.A. § 33-7-11(a)(1)(A). This is called “liability coverage.” Almost always, it is the most expensive part of your insurance premium.
Occasionally insurance agents mistakenly refer to this or customers mistakenly assume this required insurance as “full coverage.” However, if you have only this type of insurance coverage, it does absolutely nothing for you if you are hurt when the other driver is at fault. This required insurance coverage only provides coverage to the person you hit when you cause an accident, in other words, when you are at fault. Regardless, you need to know that no automobile insurance coverage provides protection for your own bodily injuries when you are at fault.
What does this minimum liability coverage mean? This minimum limit coverage means that the most money the at-fault insurance company will pay is $25,000 to any one person, and the most they will pay for any accident regardless of how many people are hurt or how badly they are hurt is $50,000. So, if more than two people are badly hurt in an accident, this means that one person may recover $25,000, but the remaining two or more have to split the other $25,000 coverage. See example no. 4 below. We see this situation often.
The problem: The lack of any or enough insurance coverage for the at-fault driver. Despite the statutory requirement, sixteen percent (16%) of Georgia drivers (that's between three and four cars for every twenty you see on Georgia roadways) are uninsured, meaning they fail to carry this required insurance; nationally, the number is fourteen percent (14%), or one in seven drivers.
Why? There are probably as many reasons for this as there are uninsured motorists, but frequently those who do not have car insurance have lost their job, or are going through a divorce, or are habitual DUI violators, or have some other personal crisis. They either allow their policy to lapse or they cannot get insurance at all. These are generally people with no assets. Furthermore, they are the drivers more likely to cause a lot of wrecks because their personal problems interfere with driving attention.
With or without liability insurance coverage, there are number of situations where you are not at fault, and there is either no coverage available or not enough coverage available. These situations include:
- The at-fault driver has no insurance. This driver is uninsured;
- Then there are the drivers who have a wreck with you and leave the scene. This is called a “hit and run.” If you cannot locate the driver, this is also an uninsured situation;
- Thirdly, the at-fault driver provides the investigating officer the wrong or invalid insurance information, and once discovered, the driver cannot be located. This problem is compounded by our large undocumented immigrant population. We recently had a case where a Hispanic man struck our client in the rear. He stayed and presented what appeared to be a valid insurance card to the police. It turned out that it wasn't valid; and the address he gave as his home address was a vacant lot across the street from a local business; and
- Finally, there is the situation where the at-fault driver has the minimum coverage required by law but your injuries far exceed $25,000.00. This driver is called an Underinsured Motorist.
As you probably now recognize in the first three situations described above, there will be no liability coverage to pay your medical expenses, lost wages, and recouping other compensation you are entitled to get back. In the last situation however, although there is liability coverage, it is not enough to compensate you fully for your damages.
The solution: Uninsured/Underinsured Motorist (UM/UIM) Coverage.
This is optional coverage. UM coverage is designed to pay any amount that the other driver owes to you for damages up to the limit of your own policy. If the other driver has no insurance, then UM coverage pays first, but if the other driver has some insurance, then UIM (the same as UM) pays second and any additional amounts owed to you based on your injuries up to the limits of your coverage.
How much UM/UIM coverage can you get? You can only get UM/UIM coverage up to the amount you carry in liability coverage. The good news is that the cost of UM coverage as compared to liability coverage is cheap. We advise our clients to carry as much UM as they feel their body is worth. Of course, this means that you will have to carry at least that much in liability coverage as well. As a minimum, your UM coverage should at least equal your liability coverage which, at a minimum, is $25,000. We recommend a minimum of $100,000.
UM insurance has some really useful features. Not only does it cover you but also it covers everyone in your car. It will also cover you and any relative who lives with you if hit by another car while: (1) riding in someone else's car, (2) walking down the road, or (3) even walking through a parking lot.
Our Georgia legislature improved this coverage several years ago. Effective January 1, 2009, the Georgia legislature enacted a new provision in the UM statute that allows you to elect to have your UM coverage kick in or “stack” once you have exhausted the coverage of the liable party. This is called the “stacking provision.” This option to be able to recover the limits of the at-fault driver's liability coverage plus your own UM coverage frequently costs just a few dollars a year. Otherwise, you may reject this stacking provision, which means your UM coverage will be reduced by the at-fault driver's policy limits.
To make sure that you have enough coverage, we recommend that you discuss your decision with your qualified insurance representative.