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Why should I buy uninsured motorist insurance?

Many times clients will ask me about uninsured motorist insurance.  The questions range from what is uninsured motorist insurance or UM and why do I need it.  They will also ask what is the difference between uninsured and underinsured motorist insurance coverage.  Another question is how much should they buy?

Uninsured motorist insurance is insurance that you purchase to cover you or your family if you are struck by someone who does not have insurance.  This can range from someone who just did not buy insurance, to someone who stole a car, to someone who is in our country illegally.  No matter the situation, if the person who hit you was at fault – then uninsured motorist insurance will kick in and pay for your injuries and damages.  It works the same as if that person had insurance.  Underinsured motorist insurance comes into play when your injuries are more severe than the insurance policy of the person who struck you.  This normally happens when the person who hit you had the minimum policy limits required under Georgia law of $25,000 per person/$ 50,000 per accident.

One thing that many people never think about is that if an uninsured or underinsured driver strikes you while you are a pedestrian you will still be covered.  This is one of the times it is most important because; as you can imagine, this is when people get hurt the most seriously.  This can also cover your children when they are outside playing.  Almost any situation where you are struck by a car and it is not your fault.

How much should you buy is a difficult thing to answer.  It may depend on whether or not you have health insurance.  Any serious injury is going to exceed the state’s minimum required limits.  A displaced fracture of the leg can easily cost $50,000 in medical expenses.  A lumber or spinal fusion can also cost in excess of $50,000.  I would always recommend carrying at least $100,000 so that if you are injured, you can at least pay the medical expenses for a surgery.  Unfortunately, most insurance companies will require you to purchase the same amount of liability coverage as your UM.  The cost for higher coverage is not proportional to the increased amount.  You will probably be surprised at the low cost of UM coverage.

If you drive a high value car, you had better have a policy higher than the minimum limits.  Is your car worth more than $25,000?  If it is then you need higher amounts of coverage.  Georgia law only requires someone to have coverage up to $25,000.  With rising vehicle costs, a new car can cost $30,000 or more.  If someone hits you who has the minimum amounts, you would not have the extra $5,000 to cover your vehicle.

If you have renewed your policy within the last year since January 1, 2009, then your agent may have mentioned stacking.  Stacking is an option which says that no matter what the other party’s insurance coverage is, you are entitled to the full amount of UM coverage that you purchased.  It seems logical that you would be but entitled but, prior to the recent law change, your company could reduce your coverage by the amount the other party had.  A $100,000 policy was worth only $75,000 if the person had the minimum limits of $25,000.  Fortunately, with the new law change you can elect to have the full coverage you purchased.


Shane Smith
Advocate for the Seriously Injured in Georgia