Traditional Underinsured Motorist Coverage

What it covers:

UIM coverage comes into play when you’re involved in an accident with another driver who is deemed at fault and whose liability limits are too low to cover the damage or medical expenses. It also covers you in hit-and-run accidents where the at-fault driver is not identified.

How it works:

Suppose the other driver’s insurance policy has a bodily injury limit of $25,000, but your medical bills come out to $50,000. If your UIM coverage limit is $50,000 or more, your policy would pay the remaining $25,000 that the at-fault driver’s insurance didn’t cover.

Traditional UIM vs. Stacking:

Traditional UIM coverage refers to coverage on a single policy. Some states allow “stacking” of UIM coverage, which means you can use the UIM coverage from multiple vehicles you have insured to pay for your damages.

Coverage limits:

Just like other forms of insurance, UIM has limits. These are the maximum amounts that will be paid out for a single accident. Coverage limits vary from policy to policy, so it’s essential to choose limits that meet your needs and provide adequate protection.

Split limits vs. Combined single limit (CSL):

UIM policies may come with split limits or a combined single limit. Split limits define the maximum payout per person and per accident. For example, a policy with split limits of $25,000/$50,000 would pay up to $25,000 for injuries to one person and up to $50,000 total for injuries to multiple people in one accident. A combined single limit policy has a single amount that it will pay out for all injuries and property damage from one accident.

Claiming:

To make a claim for UIM benefits, you need to establish that the other driver was at fault and that your damages exceed their liability coverage. You must file a claim with your insurance company, which may require documentation like the police report, medical bills, and proof of the other driver’s insurance limits.

It’s important to remember that underinsured motorist coverage laws and regulations can vary by state, so it’s always a good idea to speak with a local insurance agent or professional to understand your coverage and how it applies in your specific situation.

In Georgia, car insurance is required to offer underinsured motorist coverage at least in an amount equal to that of your liability limits. You may think of UIM coverage as a floor of your recovery. Meaning, that if your UIM coverage is $25,000, you would have insurance coverage in the amount of at least $25,000, assuming you were not at fault for the collision. If we now assume that the at fault driver has liable policy limits of $25,000, then the total amount of insurance limits would remain at $25,000 and you would only be able to recover from the at-fault driver. Essentially, traditional UIM coverage will not come into play if the at fault driver’s policy limits are above your UIM limits, but it will come into play if your limits are above the at fault driver’s liable limits.

Understanding your car insurance can be very difficult and laws consistently change. This article is not meant to provide legal advice and should not be construed as such. You should reach out to a professional to make sure you understand your coverage and seek legal advice following a collision to make sure you rights are protected.