Underinsured Motorist Coverage (UIM) is included within the Uninsured Motorist (UM) section of your auto insurance policy. This coverage applies in three specific situations: when the at-fault driver has no insurance, leaves the scene, or has insurance but with limits too low to cover the damages caused.
In Georgia, there are two UM/UIM options, and understanding how they work is essential.
The Reduced By option means your insurer pays only the difference between the at-fault driver’s liability limits and your UM/UIM limits. For example, if the at-fault driver has $25,000 in liability coverage and you carry $25,000 in UM/UIM, the reduced option subtracts these amounts, leaving $0 available from UM/UIM; you would rely solely on the at-fault driver’s $25,000. This option becomes more beneficial when your UM/UIM limits are higher than the other driver’s limits. If you carry $100,000 in UM/UIM and the at-fault driver has $25,000, you would have $75,000 available from your UM/UIM.
The Added-On option is more straightforward and often provides broader protection. With this option, your UM/UIM limits are added to the at-fault driver’s liability limits. Using the same example, $100,000 in UM/UIM plus $25,000 in liability equals $125,000 available to cover eligible damages.
Knowing which option you have and your current limits helps prevent unexpected gaps after an accident. At Calidad Insurance, we help you understand your UM/UIM options and guide you toward the best decision for your protection.
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