We have all shopped for insurance at some point in our lives and were probably bombarded with terms we didn’t understand. If we did understand them, we probably didn’t always know what those terms actually meant or how the different coverages worked together. Common questions frequently arise about what exactly is uninsured motorist coverage, underinsured motorist coverage and full coverage. These are all very important coverages and at a time when so many drivers on the road are uninsured, drivers need to consider protecting themselves from the uninsured driver. Recently The Insurance Research Council performed a comprehensive study in Georgia and determined that 18.1% of drivers in Georgia are uninsured. That is approximately one out of every five drivers. Understanding what each of these coverages mean can help you better understand how they work together.
UIM (Underinsured Motorist) Coverage
UIM can mean uninsured or underinsured. Underinsured Coverage (UIM) protects you when the at-fault driver has insurance, but not enough to cover your damages. Uninsured motorist (UM) protects you when the other driver has no insurance at all. UIM/UM are governed by O.C.G.A. § 33-7-11, which requires insurers to offer this coverage. However, in Georgia you are not required to purchase UIM/UM coverage.
Georgia has two types of UIM/UM coverages:
- Reduced-by (traditional): This reduces your UIM limit by the amount you receive from the at-fault driver’s liability policy. So, if you have $50,000 in reduced-by UIM/UM and the at-fault driver has $25,000, you could, at most, net $25,000 from your UIM/UM, totaling $50,000 overall.
- Added-on: Your UIM/UM coverage sits on top of the at-fault driver’s liability payout. You collect the full amount from their insurance first, then file a UIM/UM claim for additional coverage on top of that. Using the same numbers as above, that’s $25,000 + $50,000 = $75,000 total. So, your potential maximum payout would be $75,000; however, your case may not be that valuable. Each case is different.
O.C.G.A. § 33-7-11 requires insurers to offer added-on UIM/UM as well, so you have to actively choose the type of UIM/UM you want or reject all UIM/UM in writing.
Some UIM/UM policies may be “stacked.” If you have multiple vehicles, you need to confirm with your insurance agent if your UIM/UM is add-on or reduced by, and if you have multiple vehicles, if your UIM/UM coverages stack. Stacking means adding together the limits of multiple UIM/UM policies if you have more than one covered vehicle.
Full Coverage
“Full coverage” can mean different things to different people. It is not a legal or policy term in Georgia, but rather informal shorthand people use for a policy that goes beyond the state’s bare minimum. What is typically meant by full coverage is:
- Liability (bodily injury + property damage) — the only coverage Georgia actually requires, at minimum $25,000/$50,000/$25,000
- Collision — pays for damage to your car after an accident, regardless of fault
- Comprehensive — pays for non-collision damage (theft, weather, animals, vandalism, etc.)
UIM/UM isn’t automatically part of “full coverage.” It is a separate, optional add-on that many people either skip or don’t realize they’ve waived. Since it’s required to be offered, but not required to be purchased, an insurer can technically sell you a “full coverage” package (liability + comprehensive + collision) without UIM/UM unless you specifically ask for it or fail to reject it in writing.
The Practical Explanation
Think of the different coverages this way:
- Collision and comprehensive coverage protect your car, regardless of who’s at fault.
- Liability protects you if you cause an accident and owe other people for resulting injuries and damages.
- UIM/UM protects you and your medical/wage losses when the other driver doesn’t have any insurance or doesn’t have enough insurance to cover what they owe you.
So “full coverage” without UIM/UM will repair or replace your car (up to your limits) and cover others (up to your limits), but if the driver with minimal or no insurance seriously injures you, you could be forced to pay your own bills unless you specifically carry UIM/UM. To better protect yourself, you should always elect to have UIM/UM coverage.
Have More Questions? Contact Us!
We are happy to discuss any questions you may have about how all these insurance coverages work together and why it is important to have a coverage package that completely covers you. With 10 attorneys, more than 25 support staff and three convenient locations in Southeast Tennessee and North Georgia, we are the largest local personal injury law firm in the area. We also have a network of lawyers available in other states if needed. Warren & Griffin represents a full range of car wrecks victims. Our clients have suffered injuries ranging from strain and sprain type injuries to severe and catastrophic injuries which include amputations, broken bones, head and brain injuries, injuries resulting in paralysis, internal injuries and other life-altering injuries. We also handle death claims, commonly referred to as wrongful death claims, where loved ones of clients have been killed in car wrecks. If you need us, we are available 24 hours a day, seven days a week, 365 days a year. Justice does not sleep!
Get started by calling 706-529-4878 or submitting a free case evaluation.
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