In Georgia, it is important to have a basic understanding of automobile liability coverage. Automobile accidents, although rare in a driver’s lifetime, do happen and are something we must all deal with accordingly. Taking a proactive approach to understanding the necessary material within Georgia automobile insurance is beneficial for all Georgia motorists.
In the typical automobile liability policy issued in Georgia, the insurer (e.g. State farm, Allstate, etc.) agrees to pay on behalf of the insured driver all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death resulting therefrom and because of injury to of destruction of property, including loss of use thereof arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile. Ga. Automobile Insurance Law § 10:1 (2014-2015 ed.).
If you have purchased an automobile liability policy liability, this essentially means that your insurance company agrees to pay for any harm that results if you are found to be the “at fault driver” in an auto accident.
The insurer also has a “Duty to defend”, which means the liability insurer agrees to defend the insured in any action brought against its insured, which is covered under the terms of the policy. Id. The insurer is contractually bound to represent its insured in accidents involving the insured automobile that causes bodily injury or property damage. However, where a judgment is entered against the insured for injuries covered in the policy, the insurer is only obligated to pay that judgment up to the policy limits. Id. The insured driver must pay any amount of money that is entered in the judgment above the policy limits. For example, if a driver has a policy limit of $25,000 covering personal injury, and a court enters a $30,000 judgment against the driver for liability in an automobile accident, the driver is then responsible to pay for the additional $5,000.
When discussing Georgia liability insurance it is important to mention “stacking.” A judicially established rule that governs stacking mandates that liability insurance “follow the car” (insurance follows the car rule). This means that the coverage purchased for the automobile will follow the car regardless of who may be driving. Ga. Automobile Insurance Law § 15:1. The widely accepted judicial rule still may be altered by the terms of individual policies, and is also subject to three statutory exceptions: (1) the automobile dealer’s exception; (2) rental car agencies; and (3) insolvent liability insurers. These three exceptions change the order of stacking liability coverage in applicable situations. Id.
Within insurance law, the term stacking determines the priority of payment of insurance benefits where two or more insurers provide insurance coverage for the same insured event. Id. The term stacking comes from the idea that the primary policy forms the base and the other policies, if you have multiple cars, are “stacked” on top of the primary policy. Remember, the liability insurance coverage follows the car, so the primary policy covers the automobile being operated at the time of the incident out of which the liability arises. Id. at 15:2.
One distinction in automobile insurance that needs to be explained is the difference between liability insurance and uninsured motorist coverage (UM). Uninsured motorist insurance is beneficial to purchase because there many Georgia drivers operating their vehicles without insurance coverage. UM coverage applies if you are (1) not the at-fault driver and (2) the at-fault driver is uninsured or underinsured.
In Georgia, stacking can also apply to UM insurance coverage. Again, stacking is a potential option if you obtain insurance for more than one vehicle and you wish to combine the policies to cover the total dollar amount caused by the incident. In a situation where you are involved in an auto accident with an uninsured driver, and you are not found to be the at-fault driver, UM stacking would apply. As an example, if you have two cars, and your UM limit is $30,000, you could theoretically combine your UM coverage for a total of $60,000.
The benefit of stacking with UM coverage is that if you are involved with an uninsured motorist, you can combine your coverage to increase the payment limits of your auto insurance. The downside to stacking is that inevitably your insurance rates will be raised because insurance companies need to offset the risk of paying higher disbursements. Additionally, stacking cannot be used to cover property damage expenses, and can only be used for bodily injury damages.
As a Georgia motorist, the minimum limits of liability coverage required by law are bodily injury liability of $25,000 per person/$50,000 per occurrence, and property damage liability of $25,000 per occurrence. The majority of insured drivers in Georgia only obtain the minimum requirements of liability insurance.
No one wants to imagine the worst case scenario, but driving an automobile is one of the most dangerous activities a person can engage in. It may be necessary to seek legal counsel if you are involved in an auto accident, but it can be helpful to gain a foundational knowledge of Georgia insurance laws. Having a basic understanding of insurance liability coverage enables drivers to make intelligent decisions if misfortune occurs on the roadways.