A new pro-consumer “UM stacking” law has been passed which, beginning January 1, 2009, will allow car and truck accident victims in Georgia to maximize the benefit of any uninsured/underinsured motorist coverage contained within their own auto policy and/or any auto policy applicable to the motor vehicle in which they were traveling if it is not their own vehicle. The stated intent of this new statute passed by the Georgia Senate in March 2008 is “to change the definition of “uninsured motor vehicle” to allow uninsured motorist coverage to be stacked with other available liability coverages.”
On May 14, 2008, Georgia Governor Sonny Perdue signed into law SB 276 which amends certain parts of O.C.G.A. § 33-7-11 and provides that, effective January 1, 2009, any non-negligent driver or passenger injured in an automobile or trucking accident will have access to both the at-fault driver’s automobile liability coverage, as well as the total amount of UM (uninsured/underinsured motorist) coverage which any injured victims purchased under their own automobile policy (and/or available to them as a passenger while riding in a non-owned car or truck). Under current Georgia law, car and truck accident victims can potentially recoup damages under their own auto policy (and/or the auto policy insuring a non-owned vehicle in which they were traveling at the time of the accident) only to the extent the total amount of UM coverages available to the injured victim exceeds the total amount of the liability coverages available to the at-fault driver. Thus, beginning January 1, 2009, SB 276 changes existing Georgia law by providing that accident victims can potentially recover the full amount of any UM coverage which may apply to them in addition to the amount of automobile liability coverage available to the at-fault driver.
Prior to the passage of SB 276, Georgia remained one of the few states in the Southeast which did not mandate that policyholder’s be allowed access to the full amount of any uninsured or underinsured motorist coverage they had purchased regardless of the amount of liability coverage available to the at-fault driver. After January 1, 2009, insurance companies in this state must allow the “stacking” of an accident victim’s UM coverage as excess insurance over and above the amount of liability coverage insuring the at-fault driver. Currently, twenty-three other states, including Alabama, Florida, and South Carolina, allow the stacking of UM coverages purchased by accident victims.
Comparing Georgia UM Insurance Law Before and After Passage of SB 276
Consider the following hypothetical situations which illustrate the difference between Georgia law as it relates to the use and application of UM coverage before and after amendments to O.C.G.A. § 33-7-11 were made by Senate Bill 276.
Hypothetical No. 1: An automobile collision occurs with the driver of the striking vehicle being clearly at fault and the other driver sustaining serious injuries which lead to medical expenses of $75,000, lost wages of $50,000, and significant pain and suffering. The at-fault driver has an auto policy with a $50,000 limit of liability coverage. The injured driver of the other car has an auto policy covering his vehicle with a UM coverage limit of $50,000. Under current Georgia law, the non-negligent injured driver can only recover up to $50,000 under the at-fault driver’s auto liability policy because the amount of his own policy’s UM coverage is equal to the amount of the at-fault driver’s liability coverage. In effect, under current law, the victim’s $50,000 UM coverage must be subtracted from or offset by the at-fault driver’s $50,000 in liability coverage. Therefore, the injured victim can potentially recover the full amount of the at-fault driver’s liability insurance, but he can recover none of the UM insurance for which he had paid premiums. However, after January 1, 2009, the injured driver will be able to “stack” his UM coverage on top of the at-fault driver’s liability coverage. Because of this “stacking,” the UM coverage becomes secondary or excess insurance, and the injured victim may potentially recover up to $100,000 in total insurance proceeds ($50,000 from the insurance company which provided the at-fault driver’s liability coverage, plus $50,000 from the insurance company which provided the UM coverage on the injured driver’s vehicle. Georgia law after January 1, 2009 will allow the injured victim to get the full benefit of the UM coverage he purchased. Of course, the injured party can still bring a lawsuit against the at-fault driver and attempt to secure a verdict and judgment which is more than $100,000, the total amount of automobile insurance available. If the verdict exceeds $100,000, then the at-fault driver would be personally responsible for paying any part of the judgment which exceeds $100,000.
Hypothetical No. 2: Same scenario as above except this time, the at-fault driver has $50,000 in liability coverage under his vehicle’s auto policy and the non-negligent driver of the other vehicle has $100,000 in UM coverage. Again, the victim (either the driver or passenger) suffers serious injuries leading to substantial pain and suffering, medical expenses and lost income. Under current Georgia law, the injured party only has access to one half of this UM coverage. The victim’s own UM coverage of $100,000 is offset by the $50,000 in liability coverage insuring the at-fault driver. So, the injured party would have access to a total of $100,000 in insurance proceeds which would consist of the at-fault driver’s $50,000 auto liability coverage plus one half or $50,000 of UM coverage under his own insurance policy. However, if this accident occurs after January 1, 2009, the new law created by SB 276 will allow the injured victim to potentially recover $150,000, not $100,000. The injured party would first seek to recover $50,000 from the at-fault driver’s liability carrier. Then, he could attempt to recover 100% (or $100,000) in UM coverage which he is allowed to “stack” on top of the at-fault driver’s automobile liability coverage. Again, SB 276 allows the injured party to get the full benefit of the UM coverage for which he or she paid premiums.
Hypothetical No.3: The facts of the above two hypotheticals are the same, except that the at-fault driver has no automobile insurance. In each case, the injured party would be able to seek recovery of the entire UM coverage because there is no liability coverage available to the at-fault driver. This would be true both before and after passage of SB 276. Thus, the new legislation has no impact on cases where the at-fault driver is completely uninsured. The law in Georgia remains that in every case involving an at-fault driver who has no auto insurance whatsoever, 100% of the UM coverage is available to the injured driver or passenger of the other vehicle. In contrast, the change created by SB 276 has a very important effect upon any case where the at-fault driver has some amount of liability insurance and the injured parties have some amount of UM coverage available to them.
To summarize, SB 276 is designed to give accident victims with Georgia auto policies the chance to recover 100% of any UM coverage which they elected to purchase in all cases, regardless of whether the at-fault driver has any liability insurance and regardless of the amount of that liability coverage. SB 276 was passed to amend O.C.G.A. § 33-7-11 and allow the potential full recovery of all uninsured motorist coverage for which premiums had been paid, especially where the car or truck accident resulted in serious injury or death to an innocent driver or passenger.
The “Stacking” Provisions of SB 276 Do Not Assist Victims Injured
in Car Accidents
Which Occurred Before January 1, 2009
This new law will only apply to “policies issued, delivered, issued for delivery, or renewed in this state on or after” January 1, 2009. Accordingly, this new legislation does not apply to any motor vehicle accidents which took place prior to January 1, 2009. As to any accidents which take place on or after January 1, 2009, statutory amendments made by SB 276 will only apply if the injured driver’s policy was also “issued, delivered, issued for delivery, or renewed in this state” after that date. Accordingly, even for accidents taking place after January 1, 2009, this change in the law will not apply to automobile policies which had been “issued, delivered, issued for delivery, or renewed” prior to January 1, 2009. In sum, the new law will help victims of car and truck accidents which take place on or after January 1, 2009, where the UM coverage at issue is part of an auto policy which was “issued, delivered, issued for delivery, or renewed in this state” on or after January 1, 2009.
Consumers Must Choose Between “Stacking” or “Non-Stacking” UM Coverage
Critically, Georgia consumers should be aware that SB 276 contains an important loophole that insurance companies may attempt to use in an effort to keep their insureds from getting the benefit of this new law. SB 276 gives consumers the option of continuing to purchase automobile policies which provide that the insureds can only recover against that portion of their UM coverage which exceeds the total amount of liability coverage available to the at-fault driver. In other words, the new law allows individuals to choose UM coverage which, in effect, incorporates the current Georgia “non-stacking” law that SB 276 was introduced to change. SB 276 requires that all automobile insurers send a notice to any policyholders who have auto policies in effect on January 1, 2009 advising them that they have the option of choosing UM coverage which can be fully “stacked” on top of liability coverages available to the at-fault driver’s policy (the new law), or rejecting such “stacking” type UM coverage thereby electing to have UM coverage which would be available only to the extent it exceeds the total amount of liability coverages available to the at-fault driver (the old law).
It should be obvious that the “new law” as provided by the SB 276 amendments to O.C.G.A. § 33-7-11 will result in there being more total insurance coverage potentially available to someone seriously injured in a car or truck accident. Whether someone accepts the “new law” option of “stacking” UM coverage or elects to stay with the “old law” option of “non-stacking” UM coverage will probably not matter much in the case of an accident which results in only minor injuries. However, in car or trucking accidents where someone is killed or suffers serious injuries, they will need the maximum insurance coverage possible. Thus, in those scenarios involving death or severe injury, it will be critically important whether the victim had rejected the “stacking” type of UM coverage which SB 276 now allows and elected to stay with “non-stacking” type UM coverage, or whether the victim had chosen to maximize their UM coverage by taking advantage of the change under SB 276 and purchased “stacking” type UM coverage.
Consumers Should Accept “Stacking” UM Coverage and Reject Any “Non-Stacking”
Option Offered by Their Insurance Companies
In light of the above, we encourage all Georgia citizens to be very careful when dealing with their insurance agents. Everyone should read all documents carefully and understand them fully before signing. Georgia citizens should choose to accept “stacking” UM coverage as now provided by SB 276, and reject any option which is offered by an insurance company to have a policyholder’s UM coverage apply only to the extent it exceeds the total amount of liability coverage available to an at fault driver. For “private passenger motor vehicle insurance policies in effect on January 1, 2009,” SB 276 requires that “notices” about the two different “coverage options” available for uninsured motorist insurance be given to policyholders “at least 45 days before the first renewal of such policies.” Therefore, all Georgia citizens with auto policies which are currently scheduled to be in effect at the end of this year should anticipate seeing or receiving the required notice during the last couple of months of 2008 or first several months of 2009. Again, we recommend that all Georgia consumers accept UM coverage that will “stack” on top of the at-fault driver’s liability coverage, and reject “non-stacking” UM coverage or any option which would allow the auto insurer to deduct or offset the amount of the policyholder’s available UM coverage by the total amount of liability coverage available to the at-fault driver.
The notices will likely advise the policyholder that premiums for “stacking” UM coverage are higher than for “non-stacking” UM coverage. Thus, some insurance companies may try and discourage consumers from accepting “stacking” UM coverage by suggesting that “non-stacking” UM coverage is less expensive. However, the very small difference in premium for “stacking” UM coverage versus “non-stacking” UM coverage should not be a reason to select the latter over the former. UM coverage represents a relatively small part of the premiums usually paid for the typical automobile policy. Choosing “stacking” UM coverage instead of “non-stacking” UM coverage should only affect the total premium by a few dollars a year. That is a small price to pay for UM coverage that will provide substantially more insurance to the policyholder as illustrated by the above hypotheticals.
Georgia Consumers Who Previously Rejected UM Coverage
Will Not Get the SB 276 Required Notice Advising
Them of the Option to Purchase “Stacking” UM Coverage.
Any consumers who elected not to have any UM coverage on their automobile policies prior to January 1, 2009 may not receive any notice from their insurance company about their option to now purchase “stacking” UM coverage. In Georgia, drivers are required by law to have auto liability insurance, but they are not required to purchase or include UM coverage with their auto policies. Under O.C.G.A. § 33-7-11(a) (3), a Georgia driver has always been allowed to “reject the [UM] coverage in writing.” SB 276 did not change or affect in any way the ability of Georgia drivers to reject UM coverage altogether. Stated differently, O.C.G.A. § 33-7-11 (a) (3) was not amended so the decision to have or not have any UM coverage ultimately remains the option of the policyholder. Georgia law will continue to be that an automobile policy includes UM coverage with limits equal to the liability coverage limits unless the policyholder rejects that UM coverage in writing. In addition to rejecting UM coverage altogether, Georgia law continues to allow consumers to purchase UM coverage with limits lower than their liability limits.
Therefore, SB 276 only requires that insurance companies send a notice regarding “stacking” UM coverage to those policyholders who have not rejected UM coverage in writing prior to January 1, 2009. Accordingly, any policyholders who previously elected not to have any UM coverage are not required to receive any notice from their insurance company about changes in the law under SB 276 or their ability to purchase stacking UM coverage.
Whether a policyholder receives a notice from an insurance company or not, he or she is still entitled to have UM coverage on their auto policy, and the policyholder is specifically entitled to purchase “stacking” UM coverage. It is our opinion that all drivers should have UM coverage and all UM coverage should be the “stacking” type coverage now permitted under SB 276’s amendments to O.C.G.A. 33-7-11. Without UM coverage, drivers and their passengers are unprotected in the event a car or truck accident is caused by someone who has no automobile insurance. Without UM coverage which can “stack” and serve as excess or secondary insurance on top of any auto liability coverages available to negligent drivers, accident victims have inadequate protection in the event of a car or truck accident which leads to death or severe injuries. Act now if you previously rejected UM coverage or your automobile policy does not include UM coverage for some reason. Tell your insurance agent immediately that you want to include UM coverage with limits equal to your liability coverage. After January 1, 2009, tell your insurance agent that you want to accept the “stacking” option for UM coverage and reject the “non-stacking” option.
Georgia Drivers Should Have UM Coverage on Their Automobile Policies, and They Should Elect to Have “Stacking” Type UM Coverage Now Allowed After Passage of SB 276
To summarize, we make the following recommendations:
1. Every driver should choose to include UM coverage on their automobile policies. This type of insurance is critically important in cases where a driver or passenger is injured in a car or truck accident. If the at-fault driver has no liability insurance, the victim would have no ability to recoup insurance proceeds (except for no-fault benefits which are usually $5,000 or less) unless he has UM coverage on his policy. If someone previously rejected UM coverage, they should immediately tell their insurance agent that they want UM coverage added to their policy. The UM coverage should have a limit equal to the liability limit. If someone has UM coverage with a limit which is lower than their liability limit, they should immediately advise their insurance agent to increase the limit of UM coverage up to the limit of their liability coverage.
2. On and after January 1, 2009, everyone should accept “stacking” UM coverage and reject any “non-stacking” UM coverage option which allows the insurance company to calculate the amount of UM coverage available to any victim in a particular accident as total UM coverage minus the total liability coverage available to the at-fault driver. Choose to maximize the value of UM coverage by electing the “stacking” option whereby 100% of any applicable UM coverage will be added to the amount of liability coverage available to the at-fault driver.
3. Everyone should carry at least $100,000/$300,000 in liability and UM coverage on all their vehicles. If your policy has liability and/or UM coverage with limits of 15/30, 25/50, or 50/100, we urge you to raise these limits up to 100/300, and to consider having limits of 250/500. Anyone whose liability and/or UM limits are below 100/300 is grossly underinsured in our view. UM coverage below $100,000 for a single claim and $300,000 for multiple claimants does not adequately protect drivers and passengers against the risk of car or trucking accidents that result in death or serious injury.
Uninsured Motorist Insurance May Also Apply to Motorcycle, Bicycle
and Pedestrian Accidents
In most instances, everything said above applies to cases where the victim is a pedestrian or a bicyclist, or where they were involved in a motorcycle accident. Most automobile policies provide that the UM coverage is available to any insured who is struck by a motor vehicle while they are a pedestrian. In effect, UM insurance protects the policyholder whether he was riding inside a vehicle, standing outside of his vehicle, or walking as a pedestrian at the time of the traffic accident. Likewise, most policies provide that UM coverage will apply if the insured is riding a bicycle or motorcycle at the time he is struck by a car or truck. Also, motorcyclists should know that insurance policies which cover motorcycles can and should include UM coverage. Therefore, motorcycle owners should follow the advice given above as it relates to having UM coverage added to their motorcycle policies and choosing to accept “stacking” UM coverage after January 1, 2009.
Contact Daniel Ragland with Questions About
SB 276 and Uninsured Motorist Coverage.
Daniel Ragland is a civil trial lawyer in Atlanta with a focus on serious personal injury and wrongful death litigation. He has considerable experience handling cases on behalf of victims involved in car or trucking accidents. Mr. Ragland has expertise in the application of uninsured motorist insurance. Please contact him by phone at (770) 407 – 7300 or by e-mail at email@example.com if you want to ask questions about SB 276, the purchase of UM coverage, or any motor vehicle accident in which you or a family member have been involved.