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Posted by H. Lee Pruett

A recent telephone call from an acquaintance who happens to be a plaintiffs’ lawyer prompted a little research on my part to determine an insurance company’s obligations to provide uninsured motorist coverage, and how to know whether the coverage is “traditional” or “add-on.” With traditional UM, the insurance company is entitled to a setoff for any underlying liability coverage. For example, if the defendant driver has $25,000 in liability limits, and the plaintiff has $25,000 in UM coverage, the UM carrier has no exposure (assuming the liability carrier made no direct payments to satisfy any federal benefits liens). With add-on UM, the insurer would provide the full $25,000 in coverage after the defendant carrier’s payment of the liability limit. How do you know whether the plaintiff has traditional or add-on UM coverage?

When in doubt, read the statute. Under O.C.G.A. § 33-7-11, the insurer must offer at least $25,000 in uninsured motorist coverage. The UM limits will be the same as the insured’s liability limits, however, unless the insured chooses “affirmatively” a lesser amount. O.C.G.A. § 33-7-11(a)(1)(B). The insured may reject UM coverage entirely, but this rejection must be in writing. O.C.G.A. § 33-7-11(a)(3). The statute was amended in 2008 to provide, among other changes, the add-on UM option, effective January 1, 2009. This amendment re-defined “uninsured motor vehicle” to include a vehicle covered by a liability policy when the insured (plaintiff) has UM coverage; that coverage is simply added onto the liability coverage. O.C.G.A. § 33-7-11(b)(1)(D)(ii)(I). The insured may reject-in writing-this add-on UM coverage, and opt for the traditional coverage which, after deducting the amount of the defendant’s liability coverage, is the difference between the two. O.C.G.A. § 33-7-11(b)(1)(D)(ii)(II).

Determining coverage is, of course, critical in evaluating any personal injury case. Counsel for both plaintiffs and defendants must review the policy and the application to see whether the insured rejected UM coverage. If there is no written rejection, the UM coverage is at least $25,000/$50,000-or equal to the insured’s own liability limits, unless the insured specifically opted for a lesser amount. If there are no further written rejections, the insured has add-on UM coverage, and there is no offset for the defendant’s liability coverage. The policy provides traditional UM coverage only when the insured rejects in writing the add-on option.