UNINSURED MOTORIST INSURANCE:
4 Reasons You Need It now
There’s a “golden rule” of life that many of us heard throughout childhood from our teachers, parents and grandparents. It’s a piece of advice that frequently comes up when dealing with complex social dynamics that cause us to be “sucked in” to negative situations:
“You can only control yourself.”
It’s true, and in the adult world, it has a whole new meaning. When making coverage selections for your car insurance policy, respecting this simple concept could make a world of difference in the amount of legitimate protection you end up with.
Despite Georgia law mandating that all drivers carry a minimum amount of car insurance, roughly ten percent of drivers in the state are still not insured. So, what happens if you encounter one of them in an accident?
If you’re hit by an uninsured driver, and the accident is ruled to be their fault--or if you’re the victim of a hit-and-run--you could be stuck covering the expenses of the accident yourself. This is often a harsh reality for our clients to face, especially when they have done everything “by the book” with regards to their own car insurance.
Luckily, the addition of uninsured motorist (UM) coverage to your policy can ensure that you are safeguarded from financial ruin in these types of situations.
If you’re wondering why you never knew about this, and want to understand more about why you definitely need Uninsured Motorist coverage, keep reading!
1. It’s a small price to pay for the protection it provides.
While most policies provide a minimum coverage amount of $25,000 per person (or $50,000 total per accident), the cost of UM coverage in Georgia rarely exceeds $100 per year, and is typically no more than 5 percent of your total yearly car insurance premium. So it’s a relatively low expense to select this optional add-on--but doing so could literally save you thousands.
In addition, accessing this coverage in a time of need won’t cause your car insurance premiums to go up. Since this particular type of coverage usually only kicks in when you’re the victim of an accident (meaning the other driver is ruled to be either completely at-fault or more at-fault than you were), you won’t be penalized for using it.
2.There are several different scenarios in which you might need it.
A completely uninsured motorist (UM) is not the only uncontrollable factor on the road that can jeopardize your auto insurance coverage. A person who has a current and valid insurance policy that meets the minimum legal requirements can still be considered an underinsured motorist (UIM) if they end up being at-fault for an accident that costs more than what their policy covers.
If you happen to be the other (and totally innocent) party in an accident like this, you need UIM coverage to ensure that your injury and damage costs won’t fall back on you. With this type of coverage, the insurance company of the at-fault party would still have to pay out, but your UIM coverage (depending on your chosen policy limits) would kick in to help pay the difference.
3. Choosing this particular type of UM coverage could be a huge financial relief to you in the case of an accident.
When enrolling for UM/UIM coverage, you’ll need to choose between two distinctly different types: add-on or reduced.
Add-on UM coverage (also referred to as “excess,” “stacking”, or “new” UM coverage) gives you the most protection from financial stress after an accident with an uninsured or underinsured motorist who is at-fault for your injuries and damages.
With add-on coverage, your available UM/UIM coverage is simply added on to whatever the at-fault underinsured motorist is able to pay. Whether that person has no insurance at all, or just an insufficient amount of coverage for a particular accident--you still have access to the full amount of your UM/UIM coverage.
Let’s review a quick example of how add-on coverage works. Imagine you’re driving to work one morning--safely, responsibly, and insured with $50,000 worth of add-on UM coverage.
As you’re waiting patiently at a red light, another driver rear-ends your car at a high speed and causes you $75,000 worth of damages (both in bodily injuries and car damage). This other driver who injured you happens to carry the GA state minimum of coverage--something that driver had (understandably) chosen with the intention to keep their insurance costs low, without breaking any laws.
Unfortunately, since this minimum happens to be set at $25,000, it’s not enough to cover what you’re owed for damages. However, since you have add-on UM coverage, then not only does that $25k become available from the at-fault driver’s insurance company to help cover your injuries, but you also have access to the full amount of UM coverage that you chose on your own policy ($50,000).
Since you chose add-on coverage, you would simply add these two available amounts together ($25k and $50k), and end up with a grand total of $75,000 to support you as you recover your health and your vehicle. In this scenario, you wouldn’t owe a dime out-of-pocket...all because you decided to spend the extra $5-10 per month for this particular type of coverage.
The other available type of UM coverage is called Reduced (also referred to as “traditional”). With this type, you will have less coverage than you would with the add-on type. That’s because if you have this type of UM coverage, your coverage limit will be “reduced” by, or offset by, whatever liability coverage that other at-fault driver has.
So, let’s re-walk through the example above: you’re on your way to work one morning--driving responsibly and insured with UM/UIM coverage--but in this scenario, it’s the “reduced” or traditional type, rather than add-on. You still have a $50,000 limit for this area of your coverage, and the at-fault driver still rear-ends you at a stop light, causing you $75,000 worth of injuries and damages.
Since your $50k of UIM coverage is now going to be “reduced”, or offset by, whatever the other driver has, you must subtract that driver’s coverage amount from your available $50k. So if they happen to have $10k of coverage, then you would only be able to access $40k of your UIM coverage--not the whole $50k. If they have $50k of coverage available to help you, then that offsets your UM coverage completely, and you have access to $0 of it.
While this type of UM/UIM coverage may yield a slightly more affordable monthly premium, it obviously is not ideal, because it automatically reduces what money you have available to you in the event that you actually need to use the coverage.
4. You’re driving around not even knowing if you have it.
So, how can you check if you do?
While every insurance company is a little different, most have smartphone apps or online platforms where customers can check the coverage details for their individual auto insurance policies. If you don’t have login access, you should be able to call the customer service number (or start an online chat) from the website of your insurance company and ask how to register your account online. You can also call the company and ask for your declarations page to be emailed to you.
Once you are able to view this page, check for “Uninsured Motorist” and “Underinsured Motorist” headings on the page. These will either specify “No coverage” if you don’t have this type of insurance at all, or “Up to $X”, which shows the maximum dollar amount of accident cost that you are covered for if you run into an at-fault and poorly insured driver.
While Georgia does not require drivers to hold this type of insurance coverage, it is mandatory that it’s offered. This means that drivers are forced to make a choice between either accepting or rejecting UM coverage during the process of enrolling for auto insurance.
The ultimate mission of the Tatum Legal Group is to protect, educate and support our clients. We understand that you have a busy life full of responsibilities and people who depend on you, and can’t afford the mental and financial anguish that comes from being hit by someone who is ultimately unable to pay what they owe. With so many uncontrollable factors on the road, it only makes sense that you would take the small and affordable step of adding UM/UIM coverage to your car insurance policy before the next time you get behind the wheel.