What is the difference between add-on and traditional reduce UM coverage in Georgia?

· 3 min read

Georgia allows uninsured motorist coverage to be written in two different forms, and which one an insured has can dramatically change how much money is actually available after a serious crash. The two forms are commonly called “add-on” coverage and “traditional” or “reduced-by” coverage, and the difference is in how the UM limit interacts with the at-fault driver’s liability insurance.

Reduced-by coverage: the older default

Under reduced-by coverage, the UM limit is offset by whatever the at-fault driver’s liability insurer pays. The liability payment is treated as part of, not in addition to, the UM limit. In effect, the at-fault driver’s coverage fills the bottom layer, and UM only contributes the difference up to its own limit.

Consider a claimant with 50,000 dollars in reduced-by UM whose damages exceed that figure, hit by a driver carrying 25,000 dollars in liability coverage. The 25,000 dollars paid by the at-fault insurer is subtracted from the 50,000 dollar UM limit, leaving roughly 25,000 dollars of UM benefit. The total available is the UM limit, not the UM limit plus the liability payment.

Add-on coverage: stacking on top

Add-on coverage works differently. The UM limit sits on top of the at-fault driver’s liability coverage rather than being reduced by it. Using the same numbers, the claimant could collect the 25,000 dollar liability payment and then up to the full 50,000 dollars of UM, for a larger combined recovery, subject to actual damages. Because nothing is subtracted, add-on coverage generally provides more total protection for the same stated limit.

Why Georgia drivers have both options

Georgia’s UM statute, O.C.G.A. § 33-7-11, was amended so that insurers must make add-on coverage available, and policies are written to provide it unless the insured chooses the reduced-by form. The practical upshot:

  • Add-on coverage costs somewhat more but yields a higher ceiling on recovery.
  • Reduced-by coverage is cheaper but can leave a gap when the at-fault driver carries meaningful liability limits.
  • The election is documented in the policy, so a driver can confirm which type they hold.

The bottom line

The difference between the two is whether the at-fault driver’s liability payment is added to the insured’s UM limit or subtracted from it. Add-on coverage stacks on top and produces a larger recovery; reduced-by coverage offsets the liability payment and produces less. Under O.C.G.A. § 33-7-11, Georgia drivers can hold either, and the choice meaningfully affects what is available after a crash.

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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