Inside Insurance: Changes coming to uninsured motorist auto coverage

By David Colmans

Most drivers fear, with good reason, a traffic crash with an uninsured or underinsured driver.

If it happens, there’s a good chance it’s going to cost you money unless you have uninsured/underinsured motorist coverage on your auto policy.

Even if you have the coverage and the other driver is underinsured, a serious accident that does significant damage to your car or badly injures you or your passengers could cause serious financial problems ahead.

With the recent enactment of Georgia Senate Bill 276, there is important information regarding an additional choice in UM/UIM coverage that you need to know.

The new law, which applies to private passenger auto insurance, requires that you either select or reject UM/UIM coverage with a new feature.

Currently, the law states that when you purchase UM/UIM coverage and are in an accident with an underinsured driver, the at-fault driver’s liability coverage is deducted from your UM/UIM coverage when determining the amount to be paid after the accident for injuries and property damage.

Starting with policy renewals in 2009, another coverage option will be available:

• (The new option) UM/ UIM coverage in which the policyholder’s UM/UIM coverage is added on top of the at-fault driver’s liability insurance, to the extent of proven damages, or;

• (current law) UM/UIM coverage in which the at-fault driver’s liability coverage is subtracted from the policyholder’s UM/UIM coverage, or,

• (also current law) No UM/UIM coverage is purchased.

Here’s how you will choose which option is best for you. If you currently have UM/UIM coverage and take no action prior to your next policy renewal, you will receive, and pay for, the additional UM/UIM coverage, also known as “stacked” coverage. Because this option will provide additional coverage, it is likely to cost more than your current UM/UIM coverage.

If you do not want the enhanced UM/UIM coverage, you must opt-out of it using a form that will be sent to you by your insurance agent or company.

If you have already rejected UM/UIM coverage, in writing, and you take no action you will continue to have no UM/UIM coverage.

Georgia insured motorists will receive from their insurer at least 45 days prior to their policy renewal notification of this change in Georgia law, and will be asked to make a choice as to what coverage choice they want.

The new law that goes into effect in 2009 states that if you currently have UM/UIM coverage, and you do not respond to your insurer, you will automatically receive the enhanced coverage that may include a higher UM/UIM premium.

If you opt-out for the enhanced coverage, you will continue to be insured for UM/UIM as before. Selecting the additional UM/UIM coverage option may be important to some drivers, and less important to others. The key is that the new law gives motorists another choice when determining the right amount of coverage for themselves and their families.

Look for your 2009 auto insurance policy renewal notice that will advise you about this potential change in your coverage. Ask your agent or company if you have questions.