April 15, 2022
Vehicle insurance comes in different forms. This discussion will describe the different types that can be purchased in Georgia. Insurance rules and regulations differ by state.
Insurance can cover both personal injury and property damage liability coverage. This coverage protects you if you are at fault in causing an injury or loss to someone else State law sets the minimum about of liability insurance that is required in order to drive on the public roadways. In Georgia, the liability minimum is $25,000 for both personal injury and property damage. A driver can buy more liability insurance for his vehicle. Insurance follows the vehicle. If a vehicle owner gives permission of a person to use a vehicle, then that person is considered a permissive user and so is a covered driver. For instance, a child living in a home who has permission to use the family car is covered by the car insurance. However, if someone steals a car and causes a wreck, they would not be covered by the insurance. The insurance policy may also state who is covered and who is not covered by a policy. That is why it is always very important to read your policy and confirm that everyone you want covered by the policy is covered.
Because so many drivers are uninsured, it is important to also buy UM coverage, often referred to as uninsured or underinsured coverage. You can buy UM coverage to the extent that you have purchased liability coverage. For instance, if you have bought $50,000 in liability coverage, then you can buy $50,000 in UM coverage. If you have bought $250,000 in liability coverage, then you can buy $250,000 in UM coverage. UM coverage protects you if you are injured or suffer a property damage loss because of the negligence of another driver who is uninsured. For instance, if another driver runs a stop sign and injures you and that driver does not have insurance required by law, then you can put your insurance company on notice of the incident. Then your insurance company will step into the shoes of the uninsured driver and provide insurance to cover your claim. After payment, your insurance carrier will go against the uninsured driver to collect what the insurance company has paid out to resolve the claim. The insurance company’s claim against the uninsured driver is called a subrogation claim.
There are two types of UM coverage. There is “add-on” and “reduced” coverage. You should always purchase “add-on” coverage. You are better protected with “add-on” coverage because you can stack any UM coverage you have on top of any other available coverage of an underinsured at-fault driver. For instance, assume that you are injured by a driver who ran a red light with the minimum insurance limits of $25,000 and your medical bills and lost wages are $55,000. Assume that the at-fault driver may tender $25,000 limit to you. You may need to accept the insurance limits even though the amount is inadequate to cover your losses. However, if you have “add-on” UM coverage of another $50,000, then your UM insurance limit is added to the $25,000 paid by the at-fault driver, giving you a total of $75,000 to cover your claim. If you had bought “reduced” coverage, then your UM coverage of $50,00 would be reduced by the $25,000 coverage that the at-fault driver had, leaving you with only $50,000 total to cover your losses. So, it is always better to purchase the “add-on” UM coverage.
Some insurance carrier’s also sell Med-pay insurance. This is insurance that will pay for medical costs regardless of fault. For instance, if you are injured by an at-fault driver who is denying fault, then you can use the Med-pay coverage to pay for all or part of your medical bills until fault is determined. Med-pay insurance is usually sold in small increments of $1,000 to $5,000.