Friday, November 30, 2007
Soapbox Soapbox: Insurance nightmare
Posted by Soapbox Editor on Fri, Nov 30, 2007 at 11:00 PM
By Allie Wall
What could be scarier than a serious car accident with a driver who has little or no insurance? Thousands of dollars in medical bills and an insurance company that won’t give you the coverage for which you’ve faithfully paid each month.
In December 2006, Sandy Sloat, a West Georgia College student, survived a major head-on collision caused by an uninsured driver using a friend’s car with $50,000 in liability coverage. Sloat was hospitalized with serious injuries, at a cost of over $300,000.
Sloat’s insurance policy included $100,000 in additional “uninsured motorist†coverage. UM coverage is designed to pay for the medical bills and property damage of a car-accident victim when the at-fault driver is uninsured or underinsured.
However, Georgia law allowed Sloat’s insurance company to deduct the at-fault driver’s $50,000 liability coverage from their UM policy. Even though the Sloats had faithfully paid monthly premiums for $100,000 in UM coverage, the family was only able to access $50,000 of the policy to put toward the medical bills. Their insurance company kept the rest.
Michael Sloat, Sandy’s father, believes that current state law lets insurance companies exploit drivers who want the extra security of the UM coverage. Why shouldn’t drivers like Sloat receive the full face value of what they’ve been paying when they are hit by an underinsured driver – which is exactly what Sloat was insuring himself against?
Just like Sandy and Michael Sloat, many Georgia drivers would be shocked to learn UM coverage doesn’t “stack,†or add to, liability coverage. Because state law prohibits UM stacking, drivers covered by a UM policy cannot access all of their coverage in certain scenarios, such as when at-fault drivers have the bare minimum of liability coverage.
In fact, Georgia drivers only receive the full benefit of UM coverage if hit by an uninsured motorist.
Nearly two dozen other states – including neighbors Alabama and South Carolina – allow UM stacking when the at-fault driver has minimum coverage. State Farm Insurance, the state’s largest car-insurance carrier, estimates that the cost of UM policies in Georgia would increase on average between $2.50 and $4 a month if stacking were allowed.
According to State Farm’s data, Alabama drivers pay an average $28.75 premium for a six-month policy of $25,000 of UM coverage that will stack on top of an at-fault driver’s liability coverage. For the same UM coverage that doesn’t stack, Georgia drivers currently pay an average $13 premium.
During the 2007 General Assembly, state Sen. Cecil Staton, R-Macon, introduced Senate Bill 276, which would authorize stacking in Georgia and give Georgia drivers guaranteed access to every penny of UM coverage they pay for when it is needed for medical bills and property damage. SB 276 easily passed the Senate by a margin of 46-3, and will be eligible for action on the House floor during the 2008 General Assembly.
Allison Wall is executive director of Georgia Watch, a consumer advocacy organization.
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