Should I purchase add-on or reduced-by uninsured motorist coverage?

Add-On Insurance Coverage on a Cell Phone AppIf you have decided to purchase uninsured motorist coverage as part of your automobile insurance policy, you have made a crucial decision that will make it more likely that you will receive what you deserve if you are injured in an auto accident caused by a negligent driver. Hopefully, you are also purchasing uninsured motorist coverage to compensate you if the negligent driver had no insurance. Although these insurance coverages are not required under Georgia law, they should be considered mandatory by anyone who wants sufficient insurance coverage if involved in a motor vehicle accident.

Which Is Right for You: Add-On or Reduced-By Uninsured Motorist Coverage?

Underinsured motorist coverage will compensate you when the negligent driver’s insurance coverage is less than the full amount you are owed. For example, the driver could have purchased the minimum amount of liability coverage, which will only pay you a maximum of $25,000 for your injuries caused by a car accident. Once you decide to purchase this important insurance, you will need to decide whether to purchase add-on or reduced-by coverage. Here’s why you may want to pick add-on coverage:

  • Reduced-by coverage only pays you the difference between what the negligent driver’s insurance policy pays and your insurance coverage. For example, if you have $100,000 in underinsured coverage and the negligent driver has $25,000 of coverage, you would have $75,000 under your own policy available to compensate you.
  • Add-on insurance coverage will pay you on top of the amount the negligent driver’s company pays. This means that in the example listed above that you would have $125,000 to potentially compensate you rather than $75,000.

You should purchase a minimum of $100,000/$300,000 in both underinsured and uninsured coverage to protect yourself if you need it.

If you make the smart decision to purchase underinsured and uninsured motorist coverage, do not assume that it will be simple to make a claim for compensation with your insurance company. Your claim with your own insurance company could be more challenging to settle than your claim with the negligent driver’s insurance company. You need an experienced car accident attorney to negotiate your settlement with both insurance companies. If you have questions about your insurance coverage or were injured in a car accident and need to file a claim, fill out our online form to schedule a free, no-obligation consultation.