Uninsured Drivers and UM Insurance

If you are injured in a car accident that was caused by the negligence of another driver, you can file a claim for your injuries against that driver’s car insurance. What happens if that driver doesn’t have insurance?  What happens if that driver does have insurance but your injuries and bills are more than his insurance?  What happens if the owner of that car that hit you failed to pay for his insurance and his car was stolen at the time of the accident?

The law in Georgia is that every vehicle must be insured with at least $25,000 per person and $50,000 per accident. However, there are numerous situations where the responsible driver did not have liability insurance, was driving a stolen vehicle, fled the scene, or did not have enough insurance to cover your injuries.

About 9% to 11% of vehicles on Georgia’s roads are uninsured, putting you at a relatively high risk of being involved in a crash with an uninsured driver.

Although you are required to carry insurance on the car you drive, you are not required to carry uninsured motorist coverage (UM).

Every driver should carry UM coverage on their car.  If you do purchase UM coverage, it automatically comes with underinsured coverage (UIM), which can provide additional compensation if the at-fault driver’s insurance limit is not enough to cover your damages. UIM is also useful in providing more compensation if there are multiple victims with injuries.

Not everyone chooses to purchase UM/UIM coverage.  If you are not sure if you purchased this optional insurance, ask your insurer.  Make sure your insurer gave you a written notice stating that you expressly declined UM/UIM coverage when you purchased your auto insurance policy. If it did not, then you do possess that UM/UIM coverage even if you were unaware you have it.

What does UM/UIM Cover?

Because UM is the same as UIM, for purposes of this article we will just say UM.  Again, UM is the same as UIM.

If you do have UM coverage, then your claim is against your own insurer once the at-fault driver’s lack of insurance is verified. In a hit-and-run accident, you have to promptly notify law enforcement and obtain a police report to provide to your insurer. You must also quickly notify your own insurer, or you can lose the coverage. You also have to show physical damage that was caused by the fleeing driver. If there was no contact with your car but you claim that the other driver’s reckless driving caused you to swerve or lose control of your vehicle and crash, you need credible corroborating testimony or even surveillance video that it occurred.

Who does UM Cover?

UM insurance will also cover you if you were injured as a pedestrian or bicyclist in a hit-and-run accident. You do not need to be in your car to collect your UM insurance.

Your UM insurance also travels with you.  So, if you are out of state and are in an accident, your UM insurance will be there to protect you.

UM coverage is also provided to:

  • Your spouse living in your household
  • Any relatives of yours or your spouse residing in your household
  • Anyone who drove your car with your express or implied consent
  • Any non-relative guest riding as a passenger in your vehicle

If you were a passenger and unrelated to the driver in an uninsured accident, you first look to your own UM coverage if you have it. If not, you can seek coverage from a relative living in your household who might possess it. If neither you nor any resident relative has UM coverage, then you can use the driver’s policy if he possesses such coverage.

It is always a good idea to have more than the minimum policy limits for your liability coverage and for your UM/UIM protection. If your own injuries are serious and/or your passengers were also critically injured, limits of $25,000 or even $50,000 in UM/UIM will likely be insufficient.

Types of UM/UIM Coverage

You have two options in Georgia when purchasing UM/UIM coverage with your liability policy:

Traditional UM/UIM Coverage—this is traditional UM/UIM coverage, also called “reduction” coverage, that applies whenever your damages exceed the defendant’s policy limits. However, your own UIM coverage must be more than the defendant’s policy limits.

For instance, if the defendant’s policy limits of $100,000 are exhausted, then you can seek additional compensation under your UM provision so long as your policy limits exceeded the defendant’s limits of $100,000. If you have UM in the amount of $300,000, then you have an additional $200,000 since the first $100,000 is offset by the defendant’s contribution.

However, your insurer must have explicitly proved that you chose traditional UM coverage. If it cannot provide such proof, then you have “stacking”, in which case you can literally stack the coverages for each vehicle of your own that is separately covered or those of your resident relatives. Also, the coverage will be equal to whatever your liability limits are. If it is $100,000, then your UM/UIM coverage is also $100,000.

Add-On UM/UIM Coverage—this insurance means you can add your UIM insurance to the amount you collect from the defendant.  It will provide you with additional UM/UIM coverage in the event the defendant driver had insufficient policy limits.

For example, your damages are $900,000, but the defendant only has a $250,000/$500,000 policy. You have UM/UIM coverage on two vehicles owned by you and your spouse for $100,000 each. Your two children who live with you also have UM/UIM coverage of $100,000 each on their respective vehicles. If you chose add-on UM/UIM coverage and the policies stack, then you can use all 4 policies that have a total value of $400,000 in added-on stackable UIM coverage.

How do you collect your UIM coverage?

Generally, but not always, the way it works is once your lawyer has settled with the defendant’s liability carrier you will sign a Limited Liability Release. A limited release allows you to settle the claim against the liability carrier and retain your right to pursue the UM carriers.  If you sign a general liability release or the language of the release is ambiguous, you risk losing your right to pursue the UIM carriers and the additional compensation. So, make sure you sign a limited release!