Added On vs. Reduced By Uninsured Motorist Coverage

Podcast: Play in new window | Download

[Below is a transcript of the podcast]

This is Ann-Margaret Perkins with Perkins law firm and today I’m going to be explaining a little bit about the two different types of uninsured motorist coverage you can purchase in Georgia.

The type that was created in 2009 by our legislature in which I recommend everyone have is added onto the at-fault party’s liability limits and is usually referred to as Add-On UM. This coverage, actually even if the at-fault party has $1 million in coverage, once that is paid, your UM coverage, even if it is $25,000, is available to you because it’s automatically added onto the at-fault coverage. So if they have a million dollars in liability coverage and you have 25000 in UM coverage, then you have the possibility of recovering $1,025,000. Obviously, most people don’t carry a million dollars in liability coverage and that’s why the Add-On is so important. Most people probably carry $25,000 per person in liability coverage. And so your Add-On UM can make a significant difference in whether you’ll be able to recover sufficiently to cover all of your losses. The other type of UM coverage is called different things by different companies. Some call it reduced by, some call it traditional, but the way that it works is it does not add on to the liability coverage. You compare the two coverages. So if the at-fault party has $25,000 in liability coverage and you have $25,000 in traditional or reduced by UM coverage, then you don’t have access to your you UM coverage in the event of a claim.

If the at-fault party has $25,000 in coverage and you have $50,000 in coverage, when you compare those coverages there’s a difference of $25,000. So you would have access to up to $25,000 of your UM coverage. Whereas in that circumstance it was an add-on, at fault party had $25,000 in liability, you had $50,000 in add-on UM, you’d have access to a total of $75,000 for your losses. So, add on UM gives you the access to 100 percent of the amount of the UM coverage you buy. Whereas reduced by our traditional coverage only gives you access to the difference between the limit of the liability coverage and the limit of your UM coverage.

As I said I strongly recommend that you get Add-On UM coverage because in this day and age where most people have $25,000 in liability coverage and a visit to the emergency room can easily be $5000. Add in an MRI to that and a little bit of medical treatment and your medical expenses can be $10, $15, $20000 before you know it. If the liability carrier only has $25,000 in coverage, your recovery may be eaten up by your medical expenses and all the other losses you suffered. You really aren’t compensated for. If you have the Add-On UM, it gives you a much better chance of being able to recover all of your losses.

I hope this is helpful. If you happen to have any other questions about this, which admittedly is a confusing topic, I will be more than happy to talk to you about it. You can call my office at 770-728-6932 and you can find other information about various insurance coverages on our website at injuryispersonal.com. Thanks.