Types of Automobile Insurance Coverage and Why It Does Not Take A Law Degree to Understand

You look in your rear-view mirror and **SMASH**.  You feel the weight of your body go flying forward into the steering wheel.  You feel like you are fine, but you do have some stiffness in your neck.

You get out of your front driver door and notice the extensive damage to the back of your vehicle.  As you walk to make sure no one is injured in the other vehicle, the driver steps out.  He says he is fine.  You ask for his insurance information and he tells you that unfortunately his policy lapsed three months ago. Uh-oh...

I am shocked at how many cases I deal with everyday where at least one of the drivers involved in the accident either does not have automobile insurance or carries only the minimum policy limit required in Georgia.  The reality is almost scary.  If you are hit by a person with little to no insurance and you don’t have proper coverage, you will be the one left paying all the bills.

Here is the good news: most people in Georgia buy car insurance.  Unfortunately, most people that purchase car insurance however have no idea what coverage they are actually buying.  Hopefully this article will give you a better understanding of the different types of coverage, why each type is important and which questions to ask your insurance company.

First, every car insurance policy is required to have a Liability Policy under Georgia law.  Liability policies are generally divided into property liability and bodily insurance liability.  Most liability policies will read something like “Bodily Injury: 100,000 per person/250,000 per occurrence.”  This usually means that the policy will cover a max of $100,000 worth of bodily injury damages for each person you injure in an accident, but will not pay out more than $250,000 total for bodily injury damages for any one accident.  A similar breakdown will apply for the property claims.  The amount of liability coverage you need is dependent on the amount of your financial assets and the amount of risk you wish to take on personally, but generally, the more coverage the better.  Any jury verdict over the coverage limit could come out of your pocket, so enough coverage is critical.

Next, some Georgia drivers pay extra for policies that include Medical Payments Coverage or “MedPay.”  MedPay is used to pay your medical bills after a car accident.  Many people think that they do not need MedPay coverage because they have health insurance.  Just keep in mind that MedPay coverage can come in handy by covering all co-pays and deductables not covered by your health insurance provider.  MedPay generally will pay the bills with no questions asked after an accident until the fixed amount of MedPay coverage has completely run out.

Last, many people pay extra for Uninsured Motorist Coverage (also known as Under-insured Motorist Coverage or UM).  UM coverage is critical in cases like the one at the beginning of this article.  With UM, your insurance company “steps into” the role of the other driver’s insurance company and pays the amount that driver’s insurance company would have been required to pay if that driver had actually bought insurance.  In some instances, the UM coverage might even pay on top of the other driver's insurance coverage to pay the full amount.

Of course, these are not all the different types of car insurance coverage, but hopefully this will give you a better understanding of the three most often at play in personal injury lawsuits.  Always read the copy of your insurance policy very carefully because the terms will govern the type and extent of the coverage.  Watch for any exclusions for each type of coverage in the fine print.  Obviously, the more coverage you have, the more protected you are.  The choice of how much insurance to buy comes down to a balance between the cost of the premiums and the risk of a serious accident.  Unfortunately, in my line of work, I see the risk become a reality all too often. 

Always feel free to contact me if you have questions about insurance coverage after an accident.