Yes. You should not only protect your personal assets if you cause an accident, but due to the vast number of uninsured and underinsured motorists on the Georgia roads, you need coverage to protect yourself if they cause the accident. Keep in mind that your car insurance covers both scenarios. First, if you cause an accident, then your insurance pays for those damages up to the policy limits. If the damages exceed the policy limits then you are personally responsible for the amount greater than the those limits on your policy. If a person is injured during the accident, especially if they are seriously injured, they could sue you for personal injury and collect on a large judgment. By purchasing insurance with higher limits, you are protecting your personal assets.

The second purpose for having a car insurance policy with higher limits is to protect yourself with “uninsured motorist” and “underinsured motorist” coverage. This comes into play when you someone else causes the accident resulting in injury and that person has no insurance or a limit less than yours, then your own insurance company will pay the difference up to your policy limits. In Georgia, we have two different types of uninsured and underinsured coverages. Let’s go over each one with examples.

  1. Reduced by. This type of coverage simply means that your uninsured/underinsured coverage will be reduced by the coverage of the at-fault party’s limits.

What does this mean? Let’s say that Jack wrecks his car into yours from behind. Jack’s policy limits are the minimum required limits under Georgia law, $25,000/$50,000/$25,000. You were smart enough to have purchased uninsured/underinsured policy. More specifically, it’s reduced by the at-fault’s policy limits. Your specific uninsured/underinsured’s limits are the minimum as well, $25,000/$50,000/$25,000. Since your policy limits are reduced by the at fault’s policy limits it would mean that you would actually not be able to use your uninsured/underinsured at all in this case. Because $25,000 (your own uninsured/underinsured limits) – $25,000 (at-fault’s policy limits) = $0.

2.  Added to. Let’s take the same example. However, the big difference is that now you will be able to use your uninsured/underinsured and it will give you an additional $25,000 of coverage. Here’s how. $25,000 (at-fault’s policy limits) + $25,000 (your uninsured/underinsured since it’s added to) = $50,000.

Higher insurance policy limits protect you and your personal assets. For more information on personal injury claims, contact AJ Law Practice.