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.

Why Do Car Accident Lawyers Encourage Every Driver to Carry Uninsured and Underinsured Coverage?

Car accidents can place an enormous financial burden on you, especially if your 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.

Car accident attorneys know what a nightmare it can be for people who suffer serious injuries at the hands of uninsured and underinsured drivers.

You should carry uninsured (UM) and underinsured (UIM) coverage to protect yourself from that situation. Both types of policies can compensate you for a wide range of costs, including medical bills, lost wages, pain and suffering, rental car expenses, and more. Having UM/UIM coverage is often essential in obtaining full compensation for claims.

Are Uninsured and Underinsured Motorist Coverage Required in Georgia?

Under Georgia law, all automobile insurers in the state must offer UM and UIM motorist coverage to policyholders. 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 UM coverage, which protects you if you are hit by a driver who has no insurance coverage at all. Note that UM/UIM coverage is automatically included in all auto insurance policies unless you decline it in writing.

The minimum coverage limits are:

$25,000 per person
$50,000 per accident for bodily injuries
$25,000 in property damage with a $250, $500, or $1,000 deductible

You may choose to purchase a smaller amount of UM/UIM motorist coverage, to select tiers of coverage for different groups of insureds, or to reject it. To be eligible for UM/UIM after an accident, you must have been legally driving the vehicle at the time of the accident and must not have caused the accident.

How Does Uninsured and Underinsurance Coverage Work?

According to the Insurance Information Institute, it is estimated that about 12% of Georgia drivers have no liability insurance. If you are injured by a driver who doesn’t have enough liability insurance to cover your medical bills and other losses, having UM/UIM bundled in your auto policy can help with your financial and emotional recovery.

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, their insurance company is only required to pay you $25,000.

But if you have at least $25,000 in UM/UIM coverage, you can file a claim with your own insurance company to cover the remaining $25,000 of your expenses.

A UIM/UM policy can cover you, anyone specifically named in the policy, passengers in your vehicle, and relatives living in your home. It applies to many car accident scenarios, 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
Accidents where the at-fault driver and/or their employer is immune from liability

How Does UM/UIM Coverage Interact with Other Types of Insurance?

If the driver who caused the accident carries liability insurance, you must file a claim against their insurance policy before filing a claim against your own UM/UIM policy. Your insurance company will require the other driver’s carrier to exhaust the policy limit, or pay out the full amount allowed, before paying the remaining costs out of your policy.

Other insurance policies may also overlap with UIM or UM coverage, but it is still a good idea 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. However, there is no deductible with UM/UIM coverage and it will also protect your passengers or other members of your household who are not covered under your health insurance.

UM/UIM coverage also pays for expenses not covered by health insurance, such as lost wages and pain and suffering.

Are There Limits to UM/UIM Coverage?

Yes, all insurance policies come with coverage limits. As with liability coverage, drivers are free to purchase UM/UIM coverage in a lesser amount, select tiers of coverage for different groups of insureds, or reject UIM coverage altogether.

Remember, UM/UIM coverage will be automatically included in your auto insurance unless you decline it in writing.

You can increase UM/UIM insurance protection through stacking. “Stacked” car insurance combines UM/UIM coverage limits for multiple vehicles or properties to increase the amount an insurance company will pay for a claim.

In Georgia, only “horizontal stacking” is allowed, which means that you can combine UM/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 UM/UIM coverage, you will have a total of $50,000 of available UM/UIM coverage if they are horizontally stacked.

Not all insurance companies offer horizontal stacking and, even if they do, there may be limits on the amount of coverage you can stack.

Additionally, 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.

If you have questions about how UM/UIM will interact with other types of insurance or to learn how to increase your protection, speak with your insurance agent.

How Is the Value of a UM/UIM Claim Determined?

When evaluating your UM/UIM claim and determining how much to offer you in a settlement, your 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
Your own UM/UIM insurance coverage limits

Generally, the higher your costs, the higher the value of your claim.

If the at-fault driver has auto insurance, your legal claim will go through the normal process of settling with their insurance company. Once the at-fault driver’s policy limits are hit, then your attorney will contact your insurance company to request the remaining amount of your claim be paid by your UIM/UM coverage.

If the other driver does not have insurance or your costs exceed the driver’s policy limit, the amount you will receive for your UM/UIM claim is limited by how much coverage you purchased.

When your UM/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.

How Can I Make Sure My UM/UIM Claim Is Not Denied or Undervalued?

Because insurance companies are in the business of making money, they are often reluctant to pay out the full value of UM/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.

Immediately after the crash:

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
Notify your insurance company

Your car accident attorney can collect all the necessary evidence for you and send a demand letter to the insurance company . If your claim is denied or the insurer offers a low settlement, your attorney can negotiate with them to get maximum compensation. If need be, your attorney can help you appeal the insurance decision and, if necessary, file a lawsuit against the company.

What Are Some Common Misperceptions about UM/UIM Coverage?

Many people think they do not need UM/UIM coverage because:

They already have health insurance. However, UM/UIM coverage pays for many things health insurance does not cover, such as lost wages and pain and suffering. UM/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. You can choose the amount of coverage based on your budget.
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, some Georgia drivers do not have liability insurance despite the law.

How Can I Check to See Whether I Have UM/UIM Coverage?

If you are unsure whether you have UM/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 policy information online to see the amount of UM/UIM coverage you carry. Make sure to check your limits and exclusions to fully understand your coverage.

When Can an Insurance Carrier Exclude UM/UIM Coverage?

The exclusions in your insurance coverage can vary depending on the terms of the policy, but most insurers will exclude UM/UIM coverage if you were injured while committing a crime, racing, or driving while intoxicated.

If your policy excludes coverage, your insurer may deny or reduce your claim. One of our attorneys can help you understand your policy and determine whether your insurer is allowed to deny UM/UIM coverage based on the facts of your case.

What Penalties Might an Insurance Carrier Face for Bad Faith Failure to Pay a UM or UIM claim?

Under Georgia law, an uninsured motorist insurance carrier can face a number of penalties for bad faith refusal to pay a claim. These penalties include:

Payment of the insured’s actual damages, plus interest
Payment of the insured’s reasonable attorney’s fees
Payment of a penalty of up to 25% of the insured’s damages
A finding that the insurance company acted in bad faith, which can damage the company’s reputation and make it more difficult to attract new customers

In order to recover these penalties, you must first file a lawsuit against the insurance company. The lawsuit must allege that the insurance company acted in bad faith by refusing to pay your claim. You must also prove that the insurance company’s refusal to pay the claim caused you actual damages.

If the lawsuit is successful, the court will award you the damages you are owed, plus interest, attorney’s fees, and a penalty. The court may also find that the insurance company acted in bad faith, which can have a negative impact on the company’s reputation.

It is important to note that the penalties for bad faith refusal to pay a claim are not automatic. You must first prove that the insurance company acted in bad faith.

This can be a difficult task, but it is important to remember that the insurance company has a duty to act in good faith towards the people it insures.

If the insurance company fails to meet this duty, it may be liable for significant penalties.