When does underinsured motorist coverage kick in if the other driver has some insurance?

· 3 min read

Underinsured motorist (UIM) coverage responds when the at-fault driver carries liability insurance, but not enough to cover the harm. In Georgia it is part of the uninsured motorist coverage defined by O.C.G.A. § 33-7-11, and it becomes relevant once a gap opens between the at-fault driver’s available coverage and the injured person’s actual damages.

The trigger: damages that outrun the liability policy

The basic condition is that the claimant’s damages exceed what the at-fault driver’s liability insurance will pay. A driver who carries only the state-minimum 25,000 dollars in bodily-injury liability coverage per person but causes injuries worth far more is underinsured, and UIM is designed to address that shortfall. When the damages fit comfortably within the at-fault driver’s limits, UIM never comes into play, because there is no gap to fill.

Whether coverage is available also depends on the type of UM the injured person holds. Add-on coverage layers the UM limit on top of the liability payment, so it can contribute even when the at-fault limit is substantial. Reduced-by coverage offsets the liability payment against the UM limit, so it may contribute little or nothing when the at-fault driver’s limit is close to the insured’s own. Under the 2008 amendment to O.C.G.A. § 33-7-11, effective for policies issued or renewed on or after January 1, 2009, add-on is the default unless the insured requested reduced-by coverage in writing.

The usual sequence before UIM pays

UIM is generally a secondary source, reached after the at-fault driver’s coverage is addressed. The typical sequence runs as follows:

  • The at-fault driver’s liability coverage is pursued and resolved first, since UIM sits above it.
  • The UIM insurer is kept informed of the claim and any proposed settlement, because the policy usually requires notice and an opportunity to protect the insurer’s subrogation rights.
  • The remaining loss is then presented to the UIM coverage, up to the policy limit and subject to the add-on or reduced-by structure.

Skipping the notice and consent steps a policy requires before settling with the at-fault driver can endanger the UIM claim, so the order in which things are done matters.

How much UIM ultimately provides

UIM pays the portion of the damages that the at-fault driver’s insurance leaves unpaid, capped by the UIM limit and shaped by whether the coverage adds to or is reduced by the liability payment. It does not pay more than the injured person’s actual damages, and it does not turn a small injury into a large recovery.

The bottom line

UIM coverage kicks in once the at-fault driver has insurance but too little of it, and the injured person’s damages exceed that driver’s available limits. In Georgia it operates after the liability coverage is pursued, follows the policy’s notice requirements, and fills the gap up to the UIM limit, with the add-on or reduced-by structure determining how much it actually adds.

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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