Uninsured/underinsured motorist coverage is probably the most confusing and least understood coverage on an auto insurance policy. Uninsured motorist liability coverage provides protection for you and the occupants of your vehicle if you incur injuries as a result of a collision with a motorist who does not have any insurance and is at fault in an accident.
While bodily injury liability insurance is mandatory in the state of Georgia, some people let their policy lapse due to inability to pay the premium. Uninsured motorist liability is not a mandatory coverage in this state, and the decision to carry it is yours.
Underinsured motorist coverage, which is sold in conjunction with uninsured motorist coverage and at the same limits, provides the same protection for you and the occupants of your vehicle if you are hit by a third party, and the injuries incurred exceed the other party's liability limits.
This coverage comes in two flavors, add-on and difference coverage. In add-on coverage, the limits you select are stacked on top of the at-fault driver's liability coverage.
In other words, if the at-fault driver who hit you has the minimum statutory bodily injury limits of $25,000 per person and $50,000 per occurrence and your injuries exceed that coverage, you are entitled to collect compensation up to your underinsured motorist limits. If you do not select add-on coverage, you would only be covered for the difference between the other parties' liability coverage and your underinsured motorist limit.
Now if that is as clear as mud, let me give you an example. An at-fault insured driver hits you and carries $25,000/$50,000 bodily injury liability coverage. Your medical bills and other expenses would cost $75,000 to fully compensate you. You have selected $50,000 per person and $100,000 per occurrence uninsured/underinsured motorist coverage. If you selected the add-on coverage, you would be fully compensated for the $75,000. The $25,000 would come from the other party's bodily injury coverage and $50,000 from your underinsured motorist coverage. If you did not select add-on coverage (which cost more) you would be entitled to only $50,000, which is $25,000 from the other party's insurance and the difference between that $25,000 and your $50,000.
Now, what do you do? Look at your policy, call your company or agent and price options. Select what you can afford, but do not sell yourself short with low deductibles on comprehensive and collision coverage and less than adequate liability coverage.
Dave Pushman is the former regional vice president of Geico in Macon and is now an independent insurance agent with Tidwell and Hilburn Insurance. He can be reached at email@example.com.