As of January 1, 2009 there will be some changes to the Georgia insurance laws due to the passing of Senate Bill 276 in 2008. As passed by the house and senate, SB 276 amends Title 33 of the Official Code of Georgia Annotated, relating to insurance, so as to limit coverages under uninsured motorist provisions to automobile and motor vehicle liability policies and exclude umbrella and excess liability policies.
This bill changes the definition of "uninsured motor vehicle" to allow uninsured motorist coverage to be 'Added On' (enhanced) or 'Reduced By' with other available liability coverages and also allows insureds to select more restrictive uninsured motorist coverages. Furthermore it changes standards applicable to making and use of rates, changes prior approval requirements above mandatory minimum limits; to provide for related matters; to provide for effective dates and applicability and to repeal conflicting laws.
This change should not be confused with Stacking UM coverage, which basically increases your limits to the amount of vehicles listed on the policy.
Senate Bill 276 can be read in full on the GA General Assembly site. On the state site you can see how the GA Code will be amended in detail. Parts of SB 276, including those concerning rates, changed GA laws as of October 2008, however your options regarding Uninsured and Underinsured Motorist (UM/UNDUM and UMPD) have not yet gone into effect and are thus what will be changing as of January 1, 2009.
Under current Georgia law when you purchase UM/UNDUM coverage and are in a collision with an underinsured driver, the at-fault driver's liability coverage may be deducted from your UM/UNDUM coverage when determine the amount you can recover from your UM/UNDUM coverage.
Under the new GA law, that becomes effective in 2009, another coverage option will be available in which the policyholder's UM/UNDUM coverage can choose an option:
Uninsured Motorist - Options will be 'Added On' or 'Reduced By'.
If you currently have UM/UNDUM coverage on your Georgia personal auto insurance policy and take no action prior to your next policy renewal, you will receive, and pay for, the new additional (enhanced) UM/UNDUM coverage, also known as "Added On" coverage. Since this is extra coverage for you expect your rates to go up a bit, your insurance provider can tell you by how much.
If you do not want the enhanced Uninsured/Underinsured Motorist coverage, you must select or elect the option of 'Reduced By' of it using a form that you need to obtain from your insurance company or agent.
If you currently do not have UM/UNDUM coverage, and you take no action, you will continue to not have UM/UNDUM coverages.
All Georgia policyholders with a policy that is in force on January 1, 2009 should receive from their insurer, 45 days prior to their policy renewal, notification of this change in the GA insurance law and should explain the potential changes to your policy. You will likely be asked to select a UM/UNDUM coverage option. If you previously rejected UM/UNDUM coverage in writing you will continue to not have Uninsured/Underinsured Motorist coverage and may not receive a notice from your insurer regarding this law change.
This new Georgia law just gives you the consumer another choice when determining the coverage for you and your loved ones. Your choices are:
- You choose to not purchase any UM/UNDUM coverage. With this option you may not have any coverage if an uninsured/underinsured at-fault party causes an accident in which you injured or damaged in [available under current law and new law];
- Uninsured Motorist Coverage - Added On to At-Fault Liability Limits (Uninsured Motorist – Added On) will pay you for your damages in addition to the at-fault driver’s Liability Coverage limit up to your Uninsured Motorist – Added On Coverage limit.
- Uninsured Motorist Coverage - Reduced by At-Fault Liability Limits (Uninsured Motorist – Reduced By) will only pay you up to the difference between the at-fault driver’s Liability Coverage and your Uninsured Motorist - Reduced Coverage limit.
To see the difference in coverages, assume you choose the UM/UNDUM coverage under the current GA law and were involved in an accident with an “underinsured” motorist and suffered property damage and injuries totaling $100,000. In this example the at-fault party has liability insurance of $25,000 while you have UNDUM coverage with a limit of $75,000. So you may be entitled to $25,000 from the at-fault party’s insurer and only $50,000 from your policy ($75,000 minus $25,000) for a total of $75,000 in insurance proceeds for your $100,000 loss.
Under the new law, if you choose the new 'Added On' UM/UNDUM coverage and we assume the same facts as in the example above, than you may be entitled to $25,000 from the at-fault party’s insurer and $75,000 from your policy for a total of $100,000 equal to the amount of your loss. This option protects you better and thus will normally cost you more.
Senate Bill 276 amended various parts of the Georgia insurance law but the portion that is effective in 2009 surrounds Uninsured/Underinsured Motorist. With this new law insurance regulator for GA notes that if you have UM/UNDUM and UMPD coverage on a private-passenger automobile policy in effect as of January 1, 2009, your insurer should send you a notice of your options at least 45 days before your next policy renewal occurring after January 1st. If you do not want the new coverage, you must let your company know on the form and return it prior to your renewal date according to your company’s instructions. Otherwise, the new coverage and premium may show up on your first renewal after January 1, 2009.
For more information on changes to Georgia laws effective as of 2009 you can contact the Georgia Office of Insurance.
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