The state of Georgia requires all motor vehicle owners to secure minimum liability insurance coverage for their vehicles.This insurance provides for payment for damages in the event the other driver suffers a personal injury in the car accident.However, there is no requirement that motor vehicle owners secure uninsured motorist coverage to pay for their damages if the other driver is at fault and they have suffered a severe personal injury in the auto accident.See Jenkins & Miller Georgia Automobile Insurance Law (2007 ed.) 29:3.
Uninsured motorist coverage has aptly been called “insurance against lack of insurance”.See Jenkins & Miller Georgia Automobile Insurance Law (2007 ed.) 29:1.It is available and recoverable only when the fault causing the car accident is found to be that of the uninsured or underinsured vehicle’s driver.Id.It is an important form of insurance since it allows the injured person to recover their damages.
The purpose of UM coverage “is to place the injured insured in the same position as if the offending uninsured motorist were covered with general liability insurance.”Another way of explaining the purpose of UM coverage is that coverage is available to protect innocent injured drivers against irresponsible drivers who fail to secure coverage for auto accidents.The coverage is not available for the benefit of the irresponsible, but for those injured or caused to incur damages by the uninsured’s negligence.
Uninsured Motorist coverage includes “underinsured” motorist coverage in Georgia.Underinsured motorist coverage is available where the negligent party’s liability insurance policy limit is less than the insured’s uninsured motorist policy limit.Id.Where a tortfeasor is underinsured, the insured person may recover that amount over and above the tortfeasor’s policy limits which is equal to or less than the insured’s uninsured motorist policy limits.An example is as follows:
Assume the tort-feasor has liability coverage in the minimum limit of $25,000 per person.Further assume that the insured claimant has available UM coverage in the amount of $100,000 per person.Under these circumstances, the tort-feasor is underinsured to the tune of $75,000 ($100,000 – $25,000 = $75,000).
In such cases where the tort-feasor is underinsured, the insured’s UM carrier is entitled to a credit or set-off in the amount of the tort-feasor’s liability coverage.Thus, under the above example, the tort-feasor’s liability coverage operates as a credit or set-off against the insured’s available UM coverage.In other words, the UM carrier’s exposure is reduced by the amount of the tort-feasor’s liability coverage.Id. at 39:5.
This method of set off for the liability carrier is the majority rule across the country and is called “reduction” or“limits to limits” coverage. The method essentially supplements the at-fault motorist’s liability coverage, but only to the extent the UM coverage exceeds the liability coverage.Id. However, some states do not allow a set off for the liability carrier.Under this alternative method, called the “excess” method, the underinsured motorist coverage provides UM benefits to the insured up to the limits of the insured’s UM policy limit where the insured’s damages exceed the at-fault driver’s liability coverage.Under this method, there is no reduction in available coverage based upon the at-fault party’s liability coverage.
This “excess” method is clearly the more appropriate method for determining coverage available under the underinsured motorist scheme where the insured has contracted for and paid premiums to secure uninsured motorist coverage in the amount set out under his insurance policy.Uninsured motorist insurance exists to provide additional coverage to innocent parties.The current method in Georgia operates to limit that coverage.Georgia law should follow the “excess” method and dictate that where a specific amount of uninsured motorist coverage has been secured and paid for by an insured, there can be no reduction of that contracted for coverage simply because there is additional coverage available through the tort-feasor’s liability policy – coverage secured and paid for by a third party.This scheme in Georgia allows the uninsured motorist insurance company to limit its own liability for coverage which it promised to pay.In turn, the insured is denied what he/she was promised.