Do I have to exhaust the at-fault driver’s liability limits before tapping my UM?

· 3 min read

In most underinsured situations, the at-fault driver’s liability coverage is addressed first, and the policy’s own terms generally require it. Uninsured motorist coverage in Georgia is structured as a secondary layer for the underinsured case, so a claimant ordinarily looks to the at-fault driver’s insurance before drawing on UM benefits.

Why the liability coverage usually comes first

UM coverage written to address an underinsured driver responds to the shortfall above that driver’s available liability limits. By design, it sits on top of, or is measured against, what the liability insurer pays. Most policies contain conditions requiring the insured to use up or settle the at-fault driver’s liability coverage before the UM insurer’s obligation is fully determined, because the UM payment depends on what the liability policy contributes.

This is why claimants commonly settle with the at-fault driver’s insurer for the available limits and then turn to their own UM coverage for the remaining loss. The amount of UM available, especially under reduced-by coverage, cannot be calculated until the liability contribution is known.

The critical step that protects the UM claim

Settling with the at-fault driver carries a trap. UM insurers typically have a contractual right to be notified of a proposed liability settlement and a right to protect their subrogation interest against the at-fault driver before the claimant releases that driver. Georgia procedure allows a UM insurer to preserve its rights, often by advancing the settlement amount itself rather than letting the at-fault driver be released outright.

For that reason, a claimant generally should not finalize a liability settlement without first giving the UM insurer the notice and opportunity the policy and the statute contemplate. Releasing the at-fault driver without following these steps can compromise the right to collect UM benefits.

Where exhaustion looks different

A few situations change the analysis:

  • With a truly uninsured driver, there is no liability coverage to exhaust, so the UM claim proceeds directly.
  • Under add-on coverage, the UM limit stacks above the liability payment, but the liability layer is still ordinarily resolved first.
  • The precise requirements come from the policy language read together with O.C.G.A. § 33-7-11, so the controlling terms should be reviewed in each case.

The bottom line

A claimant generally must address and resolve the at-fault driver’s liability limits before fully tapping UM coverage, because UM is a secondary layer in the underinsured setting. Just as important is following the policy’s notice and consent steps before settling, since releasing the at-fault driver improperly can jeopardize the UM claim.

This article is for general educational and informational purposes only and is not legal advice. It does not create an attorney-client relationship, and Georgia law may change. For advice about a specific situation, consult a licensed Georgia personal injury attorney.

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