(UM/UIM) Insurance and Subrogation

How Your Insurer Gets Money Back From the Unisured/Underinsured Driver That Caused The Accident

When an uninsured or underinsured driver causes a crash, Georgia’s Uninsured/Underinsured Motorist (UM/UIM) coverage steps in. Your insurer pays your claim when there is not enough available insurance.

Then, through subrogation, the company pursues the at-fault driver to recoup what it paid you. UM/UIM puts money in your hands quickly and shifts the burden of collection to the insurer—precisely what this coverage is designed to do when the other driver doesn’t have enough insurance.

Why using UM insurance is better than trying to collect the money from an underinsured driver yourself

It is often very difficult for an individual to collect money directly from another driver who caused an accident, but does not have enough insurance.

If you were to try to collect the money yourself, you would have to go through a legal process that would likely take years. Just getting a judgment against the other driver in court would take over a year, and then you would have to try to collect that money from them.

• Having a judgment from a court does not mean you will actually get paid by the person who did not have enough insurance. Many people who cause accidents do not have enough money or assets to pay a judgment, even if they are found at fault.
• If the at fault driver is unable or unwilling to pay, you would then have to start a whole new process to try to collect the money from the at-fault driver.
• If the underinsured driver has no money or assets, you might never see a dime from them, even if you win a lawsuit. They may declare bankruptcy, and the debt could be wiped out.
• Recovering money for a judgment involves hiring a debt collection lawyer and will cost additional attorney fees.
• Even if the at-fault driver has some money, it may take them years to pay you back through legal processes like wage garnishment or bank levies.

It is always better if there is UM/UIM insurance to cover your losses. That is why we recommend that all drivers in Georgia carry as much UM/UIM insurance as they can afford.

Here are a few reasons Underinsured Motorist Coverage helps you:

You do not have to personally sue the other driver to collect the additional money they owe you. Your insurance company handles it, so you can focus on recovering from the accident.

• You get paid first: Your insurance pays you first under UM/UIM, so you aren’t waiting years for the other driver to pay and spending thousands of dollars on debt collection attorneys. Your insurance company will try to get their money back later, but they do not hold up your claim to do this. You get the financial help right away.

• Avoid wasting time and money: If the at-fault driver has no money or assets, suing them might cost a lot in time and court fees and yield no reward. The insurance company knows this too. If it’s not worth pursuing (for example, the driver has no realistic way to pay), they might not bother chasing the person either. This saves you from trying to get money out of someone who cannot pay. Either way, you already received compensation from your own policy.

Example: Let’s say you are in a car accident caused by another driver who only has $25,000 in insurance. But your personal injury case is worth $50,000. The at fault driver’s insurance would pay you $25,000 (their max limits). Your own insurance company pays you an additional $25,000 under your UM/UIM coverage. The total you receive is $50,000, which covers your medical bills and damages.

After paying you, your insurer can then sue the other driver for the $25,000 (the amount by which they were underinsured). Because you have already been made whole, you are not involved in that lawsuit. It is strictly between your insurance company and the at-fault driver.

Conclusion

Uninsured and underinsured drivers can create significant financial burdens for innocent victims. Georgia law recognizes this and provides Uninsured/Underinsured Motorist (UM/UIM) insurance to protect you in these situations. By carrying UM/UIM insurance, you do not have to worry about financing the risky, expensive and time-consuming process of trying to collect money from the underinsured driver yourself.