Automobile Insurance Coverages
Automobile Insurance Coverages

Liability Coverage

This coverage protects you or your family from claims against you if you are at fault for a wreck and injure another person. I would get at least $100,000, but get more if you can afford it. Under Georgia law, you are only required to get $25,000 but that is not worth much. When your insurance agent tells you about this coverage, there will likely be three (3) numbers.

 

For example, 100/ 300/ 100. In that example, up to $100,000 would be available to any one person, with a maximum of $300,000 payable per wreck, no matter how many people were injured. The last number is property damage coverage; meaning, the maximum your insurance would pay for the damage to the other person’s vehicle.


Anyone who has assets needs to protect themselves. If you were at fault in a wreck and did not have sufficient insurance coverage, the injured person could attempt to sue you to collect against your personal assets (above your insurance limits).

 

I would recommend getting a quote for $100,000 (100/300/x), then see what it would cost you to bump up from there.

 

Property Damage

Again the law only requires $25,000, but think how many cars there are out there that are worth more than $25,000. I would carry at least $50,000, but $100,000 is better. This will pay for the other person’s vehicle if you are at fault. It also covers other types of property damage. For example, if you ran off the road into a building and damage the building.
 

Collision

This covers your car if you are at fault for the unintentional damage to your car. It also pays when no other person is at fault (for example, a tree falls on your car). You must have this coverage if you want to fully protect against losses to your vehicle. Cost of this coverage will be based on the value of your car and your driving record. You can lower this cost by carrying a higher deductible. Just realize you have to pay that deductible if something happens. If you are at fault and do not have this coverage, your insurance will not pay for your vehicle’s repairs.
 

Medical Payments Coverage (Med Pay)

I would strongly recommend you carry at least $10,000 worth of med pay coverage. This will pay for medical bills for you and others occupying your car, without any deductible or co-pay, if you are injured in an automobile wreck regardless of who is at fault. Get quotes for different amounts, but you can get up to $50,000 (the more you have the better you are protected). Even if you have health insurance, still get med pay coverage on your automobile policy. Even though this coverage is not required under Georgia law, it is relatively cheap and is very important to have.
 

Uninsured/Underinsured Motorist (UM) Coverage

This will help protect you if you are injured [in your car] by a person who has no insurance or who does not enough [liability] insurance to cover your claim for bodily injury. There are many many uninsured drivers out there and many more than only carry the minimum liability insurance ($25,000). With the rising cost of health care, your medical bills, even for a moderate wreck, can easily exceed $25,000.00
 
There are two (2) types of UM coverage. They are commonly known as 1. Offset UM, or 2. Excess UM.I strongly recommend getting the Excess UM coverage.
 

Offset UM: Before January 1, 2009, all UM policies in Georgia were Offset UM. Meaning, your UM limits received a credit (or offset) for the at-fault driver’s liability insurance. For example, you are involved in a wreck where the at-fault driver has $25,000 of liability insurance and you have $100,000 in UM. Your $100,000 UM would subtract $25,000 and you would have only $75,000 in available UM ($100,000 – $25,000), despite the fact that you paid for $100,000 in UM coverage. In that example, if the at-fault driver had $100,000 of liability coverage, you would not have any available UM for that wreck ($100,000 – $100,000 = 0)

 

Excess UM: Available after January 1, 2009. In short, your UM does not get an offset for the at-fault driver’s liability insurance. So, no matter how much liability insurance the at-fault driver carried, you always have the full amount of your UM available to help cover your bodily injuries. In the above example, with Excess UM, you would still have the benefit of $100,000 UM coverage (not $75,000).

 
I have many clients who wish they had known about UM. Most say that their insurance agent never explained this to them. Yes, it is not mandatory under Georgia law and it costs, but when you need it, you will see it was the best thing you ever did.
 
I recommend you carry Excess UM equal to your liability limits; you cannot have more UM coverage than liability coverage (under Georgia law). Again you can ask your insurance agent to give you quotes on different amounts. For example, if you have $100,000 in liability coverage, you can have up to $100,000 in UM coverage.
 
The best thing to do is to get quotes from several different insurance companies or agents with several different levels of coverage so you can evaluate what you can afford.
 

Umbrella or Excess Coverage

This is additional coverage that adds to your underlying liability and UM coverage. If you get an umbrella policy, make sure it includes Excess UM coverage also (not just liability coverage). Usually, to get an umbrella policy you must carry higher liability limits, such as $250,000/500,000. But, this is great protection as it is basically an extension of your underlying coverage. With teenage or college age drivers I believe it is a good idea to carry umbrella coverage of $1 million or more. It is not as expensive as one might think.
 

Conclusion

Get as much liability insurance as you can afford, then get Excess UM coverage to match your liability limits. Get collision coverage and get at least $10,000 in med pay, but more is better. If available to you (based on the limits of liability insurance you buy), get an umbrella policy of $1 million or more that includes Excess UM.

 

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