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Reduction vs. Add-On Uninsured Motorist Coverage

Uninsured Motorist Coverage in Georgia, as in other states, has changed over the years. Most recently, Georgia went from being a “reduction” state to a default “add on” state. This gives Georgia residents another optional way of protecting themselves from under-insured drivers.

Just a few years ago, if you carried uninsured motorist coverage, and were injured by a negligent driver, your insurance company received a “reduction” against your coverage in the amount of the negligent driver’s personal injury policy. For example, if you’re verdict was $100K and the at-fault driver had a $25K personal injury policy, you would first receive the full $25K from the at-fault driver’s policy. But, what would you get from YOUR uninsured motorist policy?

Well, regardless of the amount of your policy it would be reduced by the amount of the at-fault driver’s policy. So, if you had a $50K uninsured motorist policy, $25K would be subtracted from it and you’d get the gross amount of $25K from your $50K policy.

If your uninsured motorist policy was for $100K (and the judgment was $100K) you still wouldn’t get $100K from your UM policy. It would be reduced by the $25K from the at-fault driver’s policy.

Worse yet, let’s assume you have $100K in damages, a $50K UM policy and the at-fault driver had a $50K policy. Under “reduction” coverage, you get ZERO from your UM policy.

Well, this changed in 2009. The new law makes “add on” the default provision unless driver’s reject it in writing. Using the same numbers as above, if you have $100K in damages, an at-fault policy of $25K and a UM policy of $50K, you would combine the two and receive $75K in recovery.

Should the at-fault driver have $50K and you have $50K in uninsured motorist coverage, you could receive the full $100K of your damages.

As most people know, the roads themselves have barely become any more safe over the last 50 years. Despite the fact that most cars have, there are still hundreds of car accidents in Georgia every day. Being uninsured or under-insured puts you, and your family, at risk should you find yourself unfortunate enough to be in one of these collisions and find yourself experiencing pain.

If you, or someone you know, has been involved in an auto accident please contact me at jason@carnellfirm.com or by phone at 770-729-4809.

- Jason Carnell

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