Underinsured Motorist Coverage: What You Need to Know
Georgia requires drivers to carry only $25,000 per person in liability insurance. For anyone who suffers serious injuries in a car accident — a broken bone, a herniated disc, a traumatic brain injury — $25,000 does not even begin to cover the medical bills, let alone lost wages, pain and suffering, and long-term care needs.
This is the problem underinsured motorist (UIM) coverage solves. When the at-fault driver’s insurance is not enough to cover your damages, your own UIM coverage provides additional compensation. Understanding how UIM coverage works in Georgia is essential to protecting yourself and your family.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage is a provision in your own auto insurance policy that kicks in when the at-fault driver’s liability insurance is insufficient to cover your damages. Here is a simple example:
- You are seriously injured in a car accident caused by another driver
- The at-fault driver carries Georgia’s minimum $25,000 per person liability coverage
- Your medical bills alone are $80,000, and your total damages (including lost wages, pain and suffering) are $200,000
- The at-fault driver’s insurer pays the $25,000 policy limit
- You file a UIM claim with your own insurer for the remaining $175,000 (subject to your UIM policy limits)
Without UIM coverage, you would be left with a $175,000 gap. You could sue the at-fault driver personally, but if they carry only minimum insurance, they likely do not have significant assets to pay a judgment.
Georgia’s UIM Coverage Law
Under O.C.G.A. § 33-34-4, Georgia insurance companies are required to offer UM/UIM coverage with every auto policy. The same rules that govern UM coverage also apply to UIM coverage:
- Mandatory offer: Your insurer must offer UIM coverage
- Default inclusion: If you did not sign a written rejection, UIM coverage is automatically included at your liability coverage limits
- Written rejection required: The only way to decline UIM coverage is through a valid written rejection
When Does UIM Coverage Apply?
UIM coverage triggers when all of the following conditions are met:
- You are injured in an accident caused by another driver
- The at-fault driver has liability insurance
- The at-fault driver’s liability limits are less than your total damages
- You have UIM coverage on your own policy
An important nuance: in Georgia, whether a driver is “underinsured” depends on the comparison between the at-fault driver’s limits and your actual damages — not between their limits and your UIM limits.
Add-On vs. Reduced UIM Coverage
Georgia offers two types of UIM coverage, and the difference is significant:
Add-On (Excess) Coverage
Add-on UIM coverage pays up to the full UIM policy limits on top of whatever you recover from the at-fault driver’s insurer. Using the example above:
- At-fault driver’s liability: $25,000
- Your UIM limits: $100,000
- Maximum total recovery: $125,000 ($25,000 + $100,000)
Reduced (Set-Off) Coverage
Reduced UIM coverage offsets the amount recovered from the at-fault driver against your UIM limits:
- At-fault driver’s liability: $25,000
- Your UIM limits: $100,000
- UIM recovery reduced by: $25,000 (already recovered)
- Maximum UIM payout: $75,000
- Maximum total recovery: $100,000
Add-on coverage costs more but provides significantly better protection. If you have a choice, add-on coverage is almost always worth the additional premium.
Critical Steps When Filing a UIM Claim
1. Notify Your Insurer Before Settling with the At-Fault Driver
This is perhaps the most important step — and the one most frequently missed. Before you accept the at-fault driver’s policy limits, you must notify your own UIM insurer. Under Georgia law, your insurer has the right to:
- Consent to your settlement with the at-fault driver’s insurer
- Substitute payment (pay you the at-fault driver’s policy limits themselves to preserve subrogation rights)
If you accept a settlement from the at-fault driver’s insurer without giving your UIM insurer proper notice and an opportunity to consent, you may waive your right to UIM benefits. This is a trap that catches many accident victims.
2. Document Your Full Damages
Your UIM claim is only as strong as your documentation. Gather comprehensive evidence of:
- All medical treatment and expenses
- Future medical care needs (supported by your doctor’s prognosis)
- Lost wages and diminished earning capacity
- Pain, suffering, and impact on daily life
3. Understand That Your Insurer Is Now the Adversary
When you file a UIM claim, your own insurer steps into the role of the adverse party. They will evaluate your claim, negotiate with you (or your attorney), and try to minimize the payout — just as the at-fault driver’s insurer would. Do not assume your own company will treat you fairly just because you are a loyal policyholder.
4. Send a Proper Demand
As with any insurance claim, present a thorough demand package to your UIM insurer that documents all damages. If the insurer refuses to pay within 60 days of a proper demand and you later prove bad faith, O.C.G.A. § 33-4-6 penalties apply.
Common UIM Claim Disputes
Coverage Disputes
Your insurer may argue that you rejected UIM coverage or that your policy does not include it. Review your policy carefully. If you did not sign a valid written rejection, UIM coverage should be included automatically. An attorney can review the rejection form (if any) for deficiencies.
Liability Disputes
Even though the at-fault driver’s insurer may have already paid its limits (implicitly acknowledging fault), your UIM insurer can still dispute liability. The UIM insurer may argue you share fault under Georgia’s comparative negligence law (O.C.G.A. § 51-12-33).
Damages Disputes
The most common dispute. Your UIM insurer will likely argue that your injuries are less severe than claimed, that some treatment was unnecessary, or that your damages are lower than you assert. This is where thorough medical documentation and expert opinions become essential.
Arbitration vs. Litigation
Many auto insurance policies include arbitration clauses for UIM disputes. Arbitration can be faster than litigation, but it also has limitations. An attorney can advise whether arbitration or a lawsuit is the better path for your case.
UIM Coverage and Georgia’s Minimum Insurance Problem
Georgia’s minimum liability requirement of $25,000 per person (O.C.G.A. § 33-34-4) is one of the lowest in the country. A single emergency room visit after a car accident can easily exceed $25,000. An overnight hospital stay, surgery, or extended rehabilitation can cost hundreds of thousands of dollars.
This means that even when the at-fault driver has insurance, the coverage is often grossly inadequate. UIM coverage bridges this gap. Without it, you are essentially gambling that you will never be seriously injured by a driver carrying minimum coverage.
How Much UIM Coverage Should You Carry?
We recommend carrying as much UIM coverage as you can reasonably afford. At minimum, match your liability limits. Better yet, consider:
- $100,000/$300,000: Provides meaningful protection for most accidents
- $250,000/$500,000: Better protection for serious injuries
- $500,000/$1,000,000: Strong protection even for catastrophic injuries
- Umbrella policy: May provide additional UIM coverage above your auto policy limits
The incremental cost of higher UIM limits is typically very modest — often just a few dollars per month for significantly more protection.
Frequently Asked Questions
What is underinsured motorist coverage in Georgia?
Underinsured motorist (UIM) coverage is part of your own auto insurance policy that provides additional compensation when the at-fault driver’s insurance limits are not enough to cover your damages. For example, if the at-fault driver has $25,000 in coverage but your injuries are worth $100,000, your UIM coverage can help bridge the gap.
How is UIM coverage different from UM coverage?
Uninsured motorist (UM) coverage applies when the at-fault driver has no insurance at all. Underinsured motorist (UIM) coverage applies when the at-fault driver has insurance, but the policy limits are insufficient to cover your damages. In Georgia, both UM and UIM coverage are governed by O.C.G.A. § 33-34-4 and are typically offered together.
Do I have to accept the at-fault driver’s policy limits before using UIM coverage?
This is a critical issue. Before accepting the at-fault driver’s policy limits, you should notify your own UIM insurer. Under Georgia law, your insurer has the right to consent to any settlement with the at-fault driver’s insurer. If you accept a settlement without your insurer’s consent, you may jeopardize your UIM claim.
How much UIM coverage should I carry in Georgia?
You should carry as much UIM coverage as you can reasonably afford. Georgia’s minimum liability limits are only $25,000 per person — which is woefully inadequate for serious injuries. Carrying $100,000 or more in UIM coverage provides meaningful protection. The additional premium for higher UIM limits is typically modest compared to the protection it provides.
Can my insurance company deny my UIM claim?
Your insurer can dispute your UIM claim, but it cannot deny a valid claim without a legitimate basis. Common disputes include questioning the extent of your injuries, arguing the at-fault driver’s coverage was adequate, or claiming you rejected UIM coverage. If your insurer wrongfully denies your UIM claim, you may have a bad faith claim under O.C.G.A. § 33-4-6.
Get Help with Your UIM Claim
Navigating a UIM claim requires understanding complex insurance law and being prepared to negotiate with your own insurance company. The attorneys at Wetherington Law Firm have extensive experience handling UIM claims in Georgia and know how to maximize your recovery.
Call us today at (404) 888-4444 for a free consultation. We will review your policy, evaluate your claim, and fight for the compensation you deserve.
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