What is Underinsured Motorist Coverage and Do I Need It?

Car insurance is complicated. It’s obviously a big business, or insurance companies would not be able to afford to advertise so frequently. When you’re choosing auto insurance, you not only need to consider the company you want to work with but also the types of coverage you want to purchase. You want coverage to provide full protection, but at the same time, you don’t want to pay for features you simply don’t need.

As attorneys who handle many accidents involving cars, trucks, motorcycles and other vehicles, the team at Michael M. Day Law Firm has worked with many different insurance companies in a wide variety of situations. In this post, we wanted to discuss one of the types of insurance that people often ask about and explain how it can help in difficult situations. So, let’s take a look at underinsured motorist coverage and how it operates in Georgia.

Overview of Car Insurance Coverage

Car insurance is designed to protect drivers from having to pay for expenses related to accidents and some other incidents such as weather damage and vandalism.

Liability Coverage – Paying for the Losses of Others

The most basic form of auto insurance is liability insurance. This protects you as a driver if you cause an accident that causes injuries or damage to someone else. It does not pay for any harm that comes to you or your vehicle. But it can prevent you from losing everything you own if someone sues you because you caused an accident.

 Policies generally include a certain amount of liability coverage to pay for physical harm caused to someone and another amount of coverage for damage to property, including vehicles. Georgia requires drivers to carry liability insurance to cover at least $25,000 worth of property damage coverage and $25,000 worth of bodily injury coverage per person (or $50,000 to cover everyone injured in an accident). As an experienced injury legal team, we know that the damage caused in an accident can exceed these amounts very easily.

Motorists can purchase more than the minimum coverage, and this protects them in situations where the losses amount to more than the minimum. If you don’t have additional coverage, someone hurt in an accident can sue you personally for the value of their medical bills, pain, suffering, car damage, and other losses.

Damage to Your Own Vehicle

Once you get beyond the minimum liability coverage, there are many optional types of coverage. Some features are more or less essential while others might be considered in the “nice to have” category. Coverage that pays for damage to your own vehicle might be essential if you have a new vehicle with a big loan. Your lender might require you to pay for these forms of coverage. On the other hand, if your car is old, the cost of the extra coverage might not be worth it. 

Collision coverage pays for damage to your vehicle in a crash regardless of who caused the collision. Comprehensive insurance pays for damage to your car caused by other factors such as hail, fire, theft, and vandalism.

Uninsured Motorist Coverage

Even though Georgia law requires all those who register vehicles to pay for minimum liability coverage to pay for damage caused by their vehicles, not everybody follows the law. There are a lot of uninsured drivers on the roads in Georgia.

If one of them causes an accident and you are injured or your car is damaged, you would have to sue the driver or vehicle owner personally to recover compensation for your losses. Very often, the drivers who take to the road without insurance do not have much money, so you would be stuck paying for everything on your own—unless you have uninsured motorist coverage.

Uninsured motorist coverage pays for your losses if the driver who caused your accident lacks insurance. It can also cover your injuries if you’re injured by a hit-and-run driver.

Underinsured Motorist Coverage

Underinsured motorist coverage is often linked to uninsured motorist coverage. This form of insurance pays for losses when the person who caused your insurance has some insurance, but the insurance coverage limits are too low to pay for all of your losses.

For instance, if you were in an accident where your medical losses were $40,000 and your $35,000 car was totaled, and the driver only had minimum coverage, then there would not be enough to pay for all of your expenses. Your underinsured motorist coverage could pay for the extra $10,000 in property damage and the $15,000 in bodily injury losses.

Uninsured and underinsured motorist coverage is often referred to as UIM coverage. It is considered so important that Georgia requires car insurance companies to offer this coverage, and it is included automatically unless policyholders specifically reject it. With so many drivers out there with little or no insurance, you can really protect yourself best by including UIM coverage in your policy.

Georgia law allows drivers to increase the practical value of their coverage through a practice known as stacking. If you have more than one vehicle insured under separate policies with the same insurance company, you can combine the value of their UIM coverage.

Insurance Companies Often Undervalue Claims

Whether you are seeking recovery after an accident through your own insurance policy or the insurance of the at-fault driver, you need to be aware that insurance companies often take steps to pay as little as possible on claims. They will often make initial offers that are far too low, and you need to negotiate considerably to get a fair recovery. Working with an experienced attorney makes this process much easier.

Insurance companies in Georgia have also been known to delay action on claims for so long that accident victims lose the right to seek compensation because the statute of limitations has passed. If you are not receiving timely responses, not being offered what you expect, or you are otherwise not receiving fair treatment from an insurance company, it is wise to contact an attorney. An experienced attorney will know how to value your losses and how long it should take to receive answers, and they can ensure that you don’t lose out due to time limits or other issues.

Michael M. Day Law Firm, LLC Stands Up to Insurance Companies

Insurance companies provide a valuable service in our mobile society, but often they have to be forced to live up to their obligations by taking legal action. If you have suffered injuries in an accident, the team at Michael M. Day Law Firm can ensure that insurance companies pay what they should for your losses. For a free consultation to find out how much your claim is worth, call 404-480-4284 or contact us online.