If your car’s ever been hit by another whose driver didn’t have adequate insurance to cover your expenses, you had two options: make up the loss from your own savings or go to court by suing your own insurance carrier for any coverage you had for uninsured or underinsured motorists (UM).
However, you may be in for a surprise. Under Georgia law, a person’s insurance company was allowed a credit for any money received from the negligent driver’s insurance company.
For example, assume that a person was hit by someone with only $25,000 in coverage. Let’s assume that the total worth of lost wages, medical bills, and pain and suffering damages are worth $60,000.00 and $25,000 has been paid by the first insurance company. So there are $35,000 worth of damages left. A person with $50,000 in UM coverage might think they are fine. However, because Georgia law has allowed insurance companies a credit, the UM carrier only has to pay $25,000 to put the total compensation to the injured person at $50,000.
This surprised a lot of people who thought they were paying for $50,000 of coverage from their insurance companies and then could only get $25,000. However, a new law signed by Governor Perdue has made it possible to avoid the above situation. Effective January 1st, 2009, the new law in Georgia (called the “stacking provision”) will allow allows drivers to piggyback (or “stack”) their uninsured/underinsured motorist’s protection on top of another driver’s policy. So in the above situation, the person would receive all the money to which they are entitled.
With the new law, if another driver who has no insurance or not enough to cover your damages and expenses hits you, you get full access to the total insurance policy limits you have paid for. Come January 1st, you’ll have three options when you renew your auto insurance: buy the new stacked coverage; leave coverage to the limits of the at-fault motorist’s policy; or, decline having uninsured/underinsured motorists coverage at all.
At the Law Offices of Michael L. Neff, we strongly encourage people to accept the stacking coverage. If you already have uninsured/underinsured coverage, you’ll automatically be signed up for the stacked option unless you opt out of it when your policy comes up for renewal. Look carefully at your renewal forms. And remember that you should be insuring yourself for protection of all your assets – including your health and your ability to earn money. If you have any questions about the above, call your insurance agent or email us.