- Underinsured motorist (UIM) coverage protects you financially if you are injured in an accident caused by a driver who has insufficient liability insurance to cover your medical costs and other losses.
- UIM coverage is different from uninsured motorist (UM) coverage, which protects you if you are hit by a driver who has no insurance coverage at all.
- Though UIM and UM coverage is not required in Georgia, insurance companies are required to offer it to policy holders in the same amount as the liability coverage purchased.
- When evaluating your UIM claim and determining how much to offer you in a settlement, the insurance company will consider factors such as the severity of your injuries, your medical bills and other economic losses, your pain and suffering, the at-fault driver’s coverage limits, and your own UIM insurance coverage limits.
If you are injured in a car accident, having insurance coverage for your medical bills and other costs is crucial to your emotional and financial recovery. Unfortunately, about one in eight drivers on the road in the United States do not carry liability insurance, according to the Insurance Information Institute.
In Georgia, it is estimated that about 12 percent of drivers have no liability insurance. Among our neighbors who frequently travel through Georgia, the numbers are even worse—over 18 percent of Alabama drivers and over 27 percent of Florida drivers are uninsured. If you are hit by one of these uninsured drivers, you may have to rely on your own insurance coverage to receive compensation.
In some cases, drivers may have minimal insurance coverage but not enough to cover the full cost of your accident. In this situation, relying on your own insurance coverage may be the only way to make up the difference between what their policy allows and the actual cost of your injuries.
What is Underinsurance Coverage?
Underinsured motorist (UIM) coverage protects you financially if you are injured in an accident caused by a driver who has insufficient liability insurance to cover your medical costs and other losses. UIM coverage is different from uninsured motorist (UM) coverage, which protects you if you are hit by a driver who has no insurance coverage at all.
For example, if you are injured in an accident caused by a driver who has $25,000 in liability coverage but your costs are $50,000, you would file a claim against the other driver’s insurance policy. However, the insurance company is only required to exhaust the policy, which means they pay you $25,000. If you have at least $25,000 in UIM coverage, you can file a claim against your own insurance policy to cover the remaining $25,000 of your expenses.
In some states, including Georgia, UM and UIM coverage can be bundled together on your auto insurance policy. Though UIM and UM coverage is not required in Georgia, insurance companies are required to offer it to policy holders in the same amount as the liability coverage purchased. O.C.G.A. § 33-7-11.
UIM coverage applies not only to the policy holder and any insured specifically named in the policy but also to passengers in the insured’s vehicle and relatives living in the insured’s household. O.C.G.A. § 33-7-11(b)(1)(B). UIM coverage applies to multiple situations involving car accidents including:
- Hit-and-run collisions,
- Accidents where the at-fault driver is uninsured or underinsured for the victim’s damages,
- Accidents where the at-fault driver has insurance, but the insurance carrier denies coverage or is insolvent, or
- Accidents where the at-fault driver and/or their employer is immune from liability.
Why Do Georgia Personal Injury Lawyers Encourage Every Driver to Carry UIM?
Car accidents can place an enormous financial burden on victims, especially if the injuries are severe. If you are involved in an accident caused by a driver with no insurance or insufficient insurance, you may end up paying those costs out of your own pocket. Our attorneys have been handling car accident cases for 30 years, so we know firsthand what a nightmare it can be for people who suffer serious injuries at the hands of uninsured/underinsured drivers.
We always advise our clients to carry UIM coverage to protect themselves from that situation. UIM coverage can compensate you for a wide range of costs, including medical bills, lost wages, pain and suffering, rental car expenses, and more. For clients with severe or catastrophic injuries, having UIM coverage is often essential in obtaining full compensation for claims.
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How Does UIM Coverage Interact with Other Types of Insurance?
If the at-fault driver carries liability insurance, you must file a claim against their insurance policy before filing a claim against your own UIM policy. Your insurance company will require the at-fault driver’s carrier to exhaust the policy limit, or pay out the full amount allowed, before paying the remaining costs out of your UIM policy.
Other insurance policies may also overlap with UIM or UM coverage, but it is still beneficial to have UIM/UM coverage. For example, you may have a health insurance policy that covers your medical bills. If so, you may have to meet a high deductible before the insurance company pays your bills. There is no deductible to meet with UIM coverage, however. UIM coverage will also protect your passengers or other members of your household who are not covered under your health insurance plan. UIM coverage also pays for expenses not covered by health insurance, such as lost wages and pain and suffering.
Some drivers have medical payments (“med pay”) coverage as an optional add-on to their auto insurance policy, which helps pay for medical expenses for them and their passengers regardless of who is at fault for the accident. Med pay is typically used to cover deductibles and co-pays, as well as other expenses that may not be covered by your health insurance policy.
Med pay coverage is usually available in limits ranging from $1,000 to $10,000, which you may choose based on your budget and the amount of your deductible. Most auto insurance policies contain offset provisions that state the amount paid out under med pay coverage will be deducted from any UIM benefits you receive. For example, if you have a $10,000 med pay limit and a $100,000 UIM limit, your insurance company would first pay out the $10,000 in med pay benefits, which would leave you with $90,000 in available UIM coverage.
If you are injured in a car accident while working, your claim may be affected by your workers compensation benefits. Typically, your employer’s workers compensation policy will pay for medical bills, prescriptions, and lost wages before you receive any payment from either the at-fault driver’s insurance company or your own UIM insurance carrier.
Generally, once your insurance claim is settled, the workers compensation insurance carrier has a lien on the amount it paid. For example, if you received $50,000 in workers compensation benefits and your settlement with the liability insurance company is $100,000, the workers compensation carrier gets paid $50,000 from the settlement.
When a settlement involves UIM/UM coverage, the UIM/UM carrier gets the benefit of a reduction in what they are obligated to pay equal to the amount of workers compensation the injured party received.
Are There Limits to UIM Coverage?
Yes, all insurance policies come with coverage limits. In Georgia, drivers are required to carry liability insurance coverage that includes at least:
- $25,000 in bodily injury per person,
- $50,000 in total bodily injury per accident, and
- $25,000 in property damage per accident.
These are only the minimum requirements, however, and many drivers opt for more coverage to increase their protection against high accident costs. While Georgia does not require drivers to carry UIM coverage, insurance companies are required by law to offer it.
Specifically, Georgia insurers must offer UIM coverage that includes at least:
- $25,000 in bodily injury per person,
- $50,000 in total bodily injury per accident, and
- $25,000 in property damage with a $250, $500, or $1,000 deductible.
As with liability coverage, many drivers choose UIM insurance with higher policy limits to protect their financial interests. Unlike required liability coverage, drivers are free to purchase UIM coverage in a lesser amount, select tiers of coverage for different groups of insureds, or reject UIM coverage altogether. Note that UIM coverage will be automatically included in your auto insurance unless you decline it in writing.
Another way to increase UIM insurance protection is through stacking. “Stacked” car insurance combines UIM coverage limits for multiple vehicles or properties to increase the amount an insurance company will pay for a claim. There are two ways to stack insurance: vertically (within one policy) or horizontally (across multiple policies).
Whether you can get stacked insurance depends on your insurer, state, and existing coverage. In Georgia, only horizontal stacking is allowed, which means that you can combine UIM coverage limits from multiple insurance policies to increase the total amount of coverage that is available to you for an accident.
For example, if you have two cars insured under two separate policies with the same insurance company and each has $25,000 of UIM coverage, you will have a total of $50,000 of available UIM coverage if you have horizontally stacked UIM insurance.
Horizontally stacked UIM insurance is a good way to increase your financial protection, but you should know that not all insurance companies offer horizontal stacking and even if they do, there may be limits on the amount of coverage you can stack. Note that horizontal stacking is only available for bodily injury coverage, not property damage coverage, and it is only available if you have multiple policies with the same insurance carrier.
How Is the Value of a UIM Claim Determined?
When evaluating your UIM claim and determining how much to offer you in a settlement, the insurance company will consider factors such as the severity of your injuries, your medical bills and other economic losses, your pain and suffering, the at-fault driver’s coverage limits, and your own UIM insurance coverage limits. Generally, the higher your costs, the higher the value of your claim.
If the at-fault driver has auto insurance, you must first exhaust the limits of their policy before filing a UIM claim with your own insurer. If the other driver does not have insurance or your costs exceed the driver’s policy limit, the amount you will receive for your UIM claim is limited by the coverage you purchased.
When your UIM coverage limits are lower than your total losses, you may not be able to recover the full amount of your claim from the insurance company. In that situation, you may need to file a lawsuit against the driver to recover the remaining damages from their personal assets.
What Happens if a UIM Claim is Denied or Undervalued?
Because insurance companies are in the business of making money, they are often reluctant to pay out the full value of UIM claims. To ensure that your claim is handled properly and you receive the settlement you deserve, you will need to document your injuries and keep track of all your medical bills, lost wage statements, and other records related to your claim so that you can present this evidence to the insurance company.
Immediately after the crash, it is important to contact the police and ensure that a police report is filed, collect contact and insurance information from all parties, take pictures of the vehicles and any injuries, seek medical attention, and notify your insurance company.
An experienced attorney can collect all the necessary evidence for you and send a strong demand letter to the insurance carrier. If your claim is denied or the carrier offers a low settlement, your attorney can negotiate with the insurance company to get maximum compensation. Your attorney can also help you appeal the insurance decision and, if necessary, file a lawsuit against the carrier.
What Are Some Common Misperceptions about UIM Coverage?
Many people think they do not need UIM coverage based on some common misperceptions, including:
- They think they do not need it because they already have health insurance. However, UIM coverage pays for many costs that health insurance does not cover, such as lost wages and pain and suffering. UIM also covers the medical bills of your passengers and other relatives living in your household.
- They think it is too expensive. However, the cost of UIM coverage is outweighed by the financial protection it provides. Also, you can choose the amount of coverage based on your budget because there is no minimum requirement in Georgia.
- They think it will only pay out if they are hurt by an uninsured driver. However, UIM coverage can also pay out if the at-fault driver has insurance, but it is not enough to cover your losses.
- They think they are protected by Georgia law that requires all drivers to carry insurance. Unfortunately, about 12 percent of Georgia drivers do not have liability insurance despite the law, and many neighboring states have much higher percentages of uninsured drivers.
How Can I Check to See Whether I Have UIM Coverage?
If you are unsure whether you have UIM coverage in your insurance policy, you can contact your insurance agent to see how much, if any, coverage you have. You can also review your insurance policy online to view your policy information, which includes the amount of UIM coverage you carry. Make sure to check your limits and exclusions to fully understand your coverage.
When Can an Insurance Carrier Exclude UIM Coverage?
The exclusions in your insurance coverage can vary depending on the terms of the policy, but most carriers will exclude UIM coverage if you were injured while committing a crime, racing, or driving while intoxicated. If your policy excludes coverage, your carrier may deny or reduce your claim. An experienced personal injury attorney can help you understand your policy and determine whether your insurance carrier is allowed to deny UIM coverage based on the facts of your case.
Consultations Are Free at The Millar Law Firm
If you or a loved one has been injured in a car accident, you should speak to an experienced personal injury lawyer about your claim and compensation options. Our attorneys know how to find all available insurance coverage and can help you recover compensation for your UIM claim. Call The Millar Law Firm at (770) 400-0000 or contact us online to set up a free consultation with one of our attorneys.